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§5.14 Contract Law—Reformation

 
Lesson 5: Tort & Contract Law

When parties come to an agreement, but because of mistake or fraud the written instrument does not correctly express their intention, the written instrument may be reformed or revised, provided that you can do this without prejudice to rights acquired by third persons. [CC §3399.] The purpose of reformation is to correct a written instrument to effectuate a common intent of both parties that was incorrectly reduced to writing. [Lemoge Electric v County of San Mateo (1956) 46 C2d 659, 663.] The party seeking relief must prove the true intent of the parties by clear and convincing evidence. [Bank of America Nat’l Trust & Sav. Ass'n v Craig (1961) 193 CA2d 281, 286.]

Circumstances when reformation may or may not be appropriate include the following:

  • If a contract has been formed, but a contract provision contradicts the terms to which the parties agreed, you may correct the error by striking the mistaken language and inserting the appropriate language.
  • A contract that is wholly void for illegality cannot be reformed, but an otherwise valid contract may be reformed by striking out an illegal term inserted by mistake.
  • Only an existing contract may be revised; you have no power to make a new contract for the parties.
  • An executed contract may not be revised when the aggrieved party, knowing of the mistake, accepts performance in accordance with the original agreement.
 
 
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