Reformation

Question 1

Reformation Definition

Answer 1

Judicial rewriting of an agreement or instrument to reflect parties’ true intent

Question 2

Reformation Requirements

Answer 2

(1): Must be an existing agreement
(2): Must be by mutual mistake

Question 3

Reformation Mutual Mistake Reqs

Answer 3

Both parties unaware that K did not reflect actual agreement and there is clear/unequivocal evidence of the mistake.

Types:
Content mistakes (errors)
Effect Mistakes:
– Parties mistaken as to effect of writing

Question 4

Reformation: Factual Mistake vs. Legal Mistake

Answer 4

Factual Mistake: didnt read K all the way? not entitled to equitable relief.

Legal Mistake: honest mutual mistake of the legal effect of K is enough if it is a gross injustice to one and an unconscionable advantage to the other.

MERE IGNORANCE NOT ENOUGH

Question 5

Reformation: Unilateral Mistake

Answer 5

Not allowed on its own.

Can reform only if:
(1): Party acted with reasonable care; and
(2): other party acted fraudulently or otherwise engaged in inequitable conduct.

Question 6

Who can seek Reformation?

Answer 6

Parties to the contract, successor in interest, and an intended third- party beneficiary

Question 7

Defenses to Reformation

Answer 7

– All Equitable Defenses

– Good-faith purchaser can prevent reformation

–Statute of Limitations (must be brought within 7 years of mistake/fraud discovery)

Question 8

NOT DEFENSES to Reformation

Answer 8

Parole Evidence
Statute of Frauds