Contract Remedies: Reformation Flashcards
What is “reformation”?
“Reformation” = an equitable remedy for MODIFYING a written instrument to reflect parties true agreement
What is the difference btwn “reformation” and “rescission”?
“rescission” - you are arguing that there was NO meeting of the minds, and therefore no contract
“reformation” - you are arguing that there WAS a meeting of the minds, but that the agreement is not accurately reflected in the written K
Describe the “valid original contract” requirement for reformation?
There MUST BE a valid prior agreement free from grounds for rescission.
Reformation is NOT available if:
- K is AMBIGUOUS or INCOMPLETE
- if there is a MUTUAL MISTAKE
What is the rule w regards to statute of frauds and reformation?
Reformation CANNOT be used to fill in terms required by SOF
HOWEVER –> DEED can be reformed to conform to sufficient memorandum
What are the grounds for reformation?
In general –> the underlying ground for reformation is that writing does not conform to parties prior valid agreement bc of MISTAKE (of fact/law) or FRAUD.
NOTE –> IF mistake relates to entering into K in the first place, the case must be analyzed under RESCISSION.
Grounds for Reformation:
- Mistake of Fact - (scrivenor’s error) -
(i) both parties mistakenly believed the writing conformed to their agreement; OR
(ii) If only ONE party knows the writing doesn’t conform - Mistake of Law - mistake in legal meaning of term used to incorporate underlying agreement
- Fraud - any instrument fraudulently represented as incorporating the prior agreement of the parties may be reformed 1`
Is the parole evidence rule a defense to reformation?
No
Is the statute of frauds a defense to reformation?
Majority view –> Not a defense
Minority view –> permits REDUCTION, but NOT ADDITION of land conveyed by written instrument
Is negligence to read the instrument a defense to reformation?
No
Is laches a defense to reformation?
Yes
Is sale of the subject matter to a BFP a defense to reformation?
Yes
