Parol Evidence is admissible in rectification case because it is seeking an equitable remedy -> court is only seeking to modify the contract so that it can rectify the contract’s drafting error
The error in drafting needs to be a bilateral mistake for rectification
Facts:
Respondent company contracts with appellant government, to make high explosive shells during war (1918)
The war comes to an end and they negotiate what is owed.
They make a final agreement (settling contract) that replaces the initial agreement that was made to enter into business
This final agreement has a final price and also states the property and buildings "specified in schedule A" would be annexed to the U.S.
There were no property or building in Schedule A
The respondent refused to give up the building and land
The appellant seeks rectification because the fact that the buildings and property weren't included was simply an error.
Issue: Did the parties intend that the property and building be included under schedule A?
the respondent clearly had the intention to include the property as they claim that they were willing to give up the property because of certain understandings they had regarding their legal rights?
The court is allowed to impose any remedy it deems fit.
The court can give remedies (reformation of contract) and specific performance.
(something about how before you needed to go to two separate courts but now its fine?
"Both parties intended the lands and buildings to be included in the schedule. These were inadvertently omitted. Rectification must follow unless some exceptional ground for excluding this remedy is advanced"
Bercovici v. Palmer
Ratio:
In determining whether there was an error in the drafting of a contract that requires rectification, a judge may use the parties' actions subsequent to the execution of the contract, as evidence of what the intent the parties had in their mind when forming the contract.
Facts:
Plaintiff is selling two retail businesses
Defendant purchases, and some funny correspondence goes on with the drafting of the final document between both parties' attorneys.
The deal is signed
Included in the deal is the transfer of "Lot 6 in Block 33A, Lakeview, Regina Beach, etc" from plaintiff to defendant
The plaintiff does not own a Lot 6 in Block 33A, but owns Lot 6 in Block 33
The plaintiff claims there was an error and the land wasn't meant to be included, the defendant says it was always in the deal
The defendant wants a rectification to correct the address in the contract
The plaintiff wants a rectification to remove the property from the contract
Issue:
Should the contract be rectified for the defendant or plaintiff?
Can the judge make use of the parties' actions after the contract is executed, as evidence regarding what the parties intended the contract to regard
Decision:
For Plaintiff, Defendant's actions indicate the property wasn't considered at the formation of the contract
Reasons:
The trial judge gives an extensive list of actions which both parties performed after the contract was signed which show that that particular property was not a part of the negotiations and was included by mistake
The defendant appeals, (partially?) on grounds that the trial judge shouldn't have used actions after the contract was executed to make his Decision:
The appeals judge states the principles of rectification, and that the court can use actions after the fact to determine what was intended.
The court must be satisfied by evidence which leaves no 'fair and reasonable' doubt that the deed impeached does not embody the final intention of the parties
"Rectification is concerned with contracts and documents, not with intentions. In order to get rectification, it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly." (Denning)
The evidence must be so satisfactory as to leave no room for such doubt; parol evidence must be adequately supported by documentary evidence and by considerations arising from the conduct of the parties.
Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd.
Ratio:
Four hurdles plaintiff must clear in order to attain rectification
Must establish existence and content of prior oral agreement
Must show the defendant knew or ought to have known of the mistake in reducing the oral terms to writing
Requires a prior oral contract whose terms are definite and ascertainable.
Plaintiff must establish that the terms agreed to orally were not written down properly
Error can be fraudulent or innocent
At the time of execution of the contract the defendant out to have known of the error and the plaintiff did not.
The defendant, trying to rely on the mistake, amounts to fraud or the equivalent of fraud
Four hurdles plaintiff must clear in order to attain rectification
Must establish existence and content of prior oral agreement
Must show the defendant knew or ought to have known of the mistake in reducing the oral terms to writing
If allowing the mistake would be fraud, or equivalent to fraud, rectification ay be available
Must show the precise form in which the written instrument can be made to express the prior intention
The prior three hurdles must be proved "beyond a reasonable doubt"
Can be supported by documentary evidence
Can also be supported by the conduct of the parties, or "other proof"
Appellant wants a 5th hurdle:
"rectification should not be available to individuals who have been negligent in reading the document"
This is too restricting
"one reason why the defence of contributory negligence or want of due diligence is not persuasive in a rectification case is because the plaintiff seeks no more than enforcement of the prior oral agreement to which the defendant has already bound itself. "
