rectification Flashcards
Rectification
Why is it difficult to obtain?
an applicant must show an outward expression of an accord between the parties which shows the common continuing intention of the parties was in favour of the term omitted from the document
Irish Life Assurance Company Ltd v Dublin Land Securities Ltd [1989] IR 253
The test:
- There was a common and continuing intention between the parties.
- It doesn’t have to be a previous written agreement it can be an oral one too?
- Convincing proof that the current agreement does not reflect the common and continuing intention.
- The party seeking rectification must be able to show what that intention was. (lots of evidence will be needed!)
Leopardstown Club Ltd v Templeville Developments Ltd [2010] IEHC 152
Plaintiff (landlord/licensor) seeking to rectify a lease and a license agreement entered into with the Defendant (tenant/licensee);
Issue – plaintiff contends phrase “and parking” interpolated into “the New Site”, with this interpolation being construed at arbitration to impose on the plaintiff an obligation at the termination of the lease to demise to the defendant an area for car parking;
Dispute, in effect, was a shift in the area over which car parking rights would be exercised;
Plaintiff contents this was not the intention of the parties and that the present interpretation was a mistake;
DISPUTE ON WHETHER THE CARPARK WAS INCLUDED.
Can rely on prior provisional agreements to flesh out agreements - Contradicts Parol Evidence Rule
In applying he Irish Life Case - rectification was granted.
Monaghan County Council v Vaughan [1948] IR 306
Highlights role of common continuing intention
Shipley – brought into this jurisdiction
-rejection of the traditional approach
FACTS:
-monaghan county council – invited tenders for demolition work and the removal of valuable materials from a delicit site
-Dixon J – clear that the intention of both parties was that the defendant would pay for the work (Vaughan)
-County council – contract that said that the defendant should be paid for the demolition work – mutual mistake – parties had agreed on the matter and was not reflected in the written contract
Dixon J – rejected the argument that there could be no rectification because there was no previous agreement between the parties which was capable of being enforced
Rectification – granted
▸ Dixon J: “I am of opinion that the defendant saw the error into which the County Council had fallen when the contract was read over to him and decided to take advantage of it…What is material is that both parties were agreed upon certain matters and that the completed contract did not correctly represent the substance of their agreement. A unilateral mistake arises where one of two or more parties is not ad idem with the other party or parties, and there is therefore, no real agreement between them.”
-Dixon J – rectification is available wherever there is sufficient evidence of common intention with regard to a particular provision of the contract
“the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties”
Irish Life Assurance Company Ltd v Dublin Land Securities Ltd [1989] IR 253
Convincing proof required that the instrument does not reflect the common intention of the parties, especially where long negotiations have taken place between the parties, both of whom have taken legal advice during such negotiations
This case is an example of rectification being refused due to a lack of common continuing intention;
Plaintiff owned portfolio of ground rents and land that were subject to a CPO;
Plaintiff sought to sell land to the defendant to exclude lands subject to CPO but due to mix-up these were included in the deal;
Plaintiff intention to exclude communicated to agent of defendant very imprecisely and this was not passed on to the defendant;
Rectification refused as defendant did not know the intention of the plaintiff;
Ferguson v Merchant Banking Ltd [1993] 3 IR 382
Refusal of rectification due to lack of precision as to common intention;
Need to be able to suggest what the rectified contract is going to look like.
If you are looking to rectify an entire contract/ wide scope of terms, rectification will be unlikely.
Here the prior intention was so unclear and very broad.
Rectification is not creating a new contract is just rectifying a mistake.
What is a common mistake?
Both parties have made a mistake as to what the terms of the contract are.
What case demonstrates the assessment for common mistake?
Monaghan County Council v Vaughan [1948] IR 306
Monaghan County Council v Vaughan [1948] IR 306
(in terms of common mistake)
All about the idea of an objective test as to whether there is a common mistake
McD v McD [1993] ILRM 717
-Lack of precision
-custody proceedings during a divorce
-pl and def – signed a settlement in relation to court proceedings regarding custody and maintenance of their children
-pl sought rectification – claiming it had been agreed that the husband would pay all of the legal fees
▸ “In order to rectify the contract the court must be satisfied that there was a common and continuing intention and that the agreement as recorded does not represent [the parties’] common intention. …| [The court] must also be satisfied as to precisely what that common intention was.”
Barron J – precise intention – husband pay costs – nature of the costs
Clear from drafting of subsequent documents – no consensus ad idem
-common intention needs to be precise = the court must be satisfied precisely what the common intention was – HIGH STANDARD
-Common intention as not clear and lacked sufficient evidence
Leopardstown Club Ltd v Templeville Developments Ltd [2010] IEHC 152
Irish courts adopt an objective test of common intention where rectification is sought for common mistake;
“The requirement, that common intention be determined objectively, means that a subjective change of mind on the part of one party, following a common expression of outward accord, cannot be regarded, unless clearly communicated in a manner identifiable to the reasonable observer, as negating the prior common intention evidenced by this outward expression of accord. ”
What case demonstrated flaws with regards to the object approach to common mistakes?
Frederick E. Rose (London) Ltd v W.H. Pim Junior & Co. Ltd [1953] 2 QB 450
Frederick E. Rose (London) Ltd v W.H. Pim Junior & Co. Ltd [1953] 2 QB 450
- Case concerned the defendant agreeing to supply the plaintiff with ”horsebeans”;
- Both parties were mistaken in their belief that horsebeans were “feveroles”;
- Beans supplied were not in fact “feveroles”, but were another type of less valuable bean;
- Plaintiff sought rectification of the contract by addition of the word “feveroles” after the word “horsebeans”;
On appeal, it was held that the parties entered into a concluded oral agreement for horsebeans, and that the written contracts were for the same items, and so rectification was not allowed as there was no proof of a written agreement which did not correspond with the contract as both parties intended throughout to buy horsebeans (even though, subjectively, both were mistaken as to what the items were);
