The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this information, the plaintiffs contracted to buy a quantity of horsebeans from the defendants, which they then sold on as ‘feveroles’ to the Egyptian buyers. To fulfil the contract, the defendants purchased ‘horsebeans’ from an Algerian supplier. There are in fact different varieties of horsebeans and those supplied were ‘feves’, which were less valuable than ‘feveroles’. The Egyptian buyers claimed the difference in value as damages from the plaintiffs, who then sought to rectify their contract with the defendants by adding the word ‘feveroles’ after the references to ‘horsebeans’. Held; Rectification was granted.
The court considered the circumstances under which it could order rectification of a contract: ‘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; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties – into their intentions – any more than you do in the formation of any other contract. You look at their outward acts, that is, at what they said or wrote to one another in the coming to their agreement, and then compare it with the document that they have signed. If you can predicate with certainty what their contract was, and that it is, by a common mistake, wrongly expressed in the document, then you rectify the document; but nothing less will suffice. It is not necessary that all the formalities of the contract should have been executed so as to make it enforceable at law . . but, formalities apart, there must have been a concluded contract. There is a passage in Crane v Hegeman-Harris Co. Inc. [ [1939] 1 All ER 662, 664 ] which suggests that a continuing common intention alone will not suffice; but I am clearly of the opinion that a continuing common intention is not sufficient unless it has found expression in outward agreement. There could be no certainty at all in business transactions if a party who had entered into a firm contract could afterwards turn round and claim to have it rectified on the ground that the parties intended something different. He is allowed to prove, if he can, that they agreed something different… but not that they intended something different.’
Judges:
Lord Denning
Citations:
[1953] 2 QB 450
Jurisdiction:
England and Wales
Citing:
Cited – Crane v Hegeman-Harris Co Inc ChD 1939
A continuing common intention of the parties to a document alone will not suffice to justify rectification. For rectification to be appropriate, there must be convincing proof that the concluded instrument does not represent the common intention of . .
Cited – Lovell and Christmas Ltd v Wall CA 1911
The written contract contained a restrictive covenant limiting the defendant’s freedom to carry on the business of a ‘provision merchant’ other than on behalf of the plaintiff company. On the facts found, the parties in their discussions before the . .
Cited by:
Explained – Joscelyne v Nissen CA 1970
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them . .
Cited – Lansing Linder Ltd v Alber ChD 2000
Pension scheme rules were amended varying the ages etc for retirement. The rules gave the company power to amend the rules with the consent of the Trustees. The original rules permitted early retirement on an immediate, but actuarially reduced, . .
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Explained – London Weekend Television Ltd v Paris and Griffith ChD 1969
Megaw J said: ‘Where two persons agreed expressly with one another what was the meaning of a particular phrase but did not record their definition in the contract itself, if one of the parties sought to enforce the agreement on the basis of some . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Equity, Contract
Updated: 15 July 2022; Ref: scu.184575