If an error is discovered in a document after it has been completed, the parties may apply to the court for rectification. Rectification is the legal mechanism that allows a formally executed document to be corrected so that it accurately reflects what the parties had originally intended
What kind of mistakes can be corrected by the remedy of rectification?
Misdescriptions – e.g. a clause in a lease which accidentally says ‘landlord’ where it should have said ‘tenant’ - Littman v Aspen Oil (Broking) Ltd [2005].
Missing words and omissions – e.g. where critical words or provisions have been omitted from a standard form agreement Tropwood AG of Zug v Jade Enterprises Ltd (The Tropwind) (No 2) [1981].
Incorrect subject matter – e.g. a clause in a lease stated that the definition “demised premises” included shop units, but there was evidence from both parties to show that the definition should have excluded shop units - JIS (1974) Ltd v MCP Investment Nominees 1 Ltd [2003].
Wrong words – e.g. where the parties considered the words they used bore a different meaning from their correct meaning - Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 3.
It is important to note, however, that rectification cannot be used to change the main substance of the transaction or correct an error in the transaction itself.
Common mistake - where both parties mistakenly believe that the document gives effect to their intention.
Unilateral mistake - where one party makes a mistake, which is known to the other party.
If both parties agree to rectification, the mistake can be corrected by the parties entering into a deed of rectification.
If the parties are not in agreement, or if the parties want the rectification to have retrospective effect, then an application to the court is required. In this scenario, the burden of proof falls on the party seeking rectification to establish that the agreement does not reflect the parties’ intentions.
It is important to note that rectification may not be available if there is unreasonable delay, especially if the delay has caused hardship on the defendant or a third party.
Rectification is a useful tool but parties need to act quickly to preserve the remedy. If the parties are not in agreement as to whether rectification is required, the party seeking the remedy is required to satisfy the evidential burden to establish why the document does not reflect the parties’ intentions.
For more information, please contact our property disputes team.
