The parties had reached a clear common understanding in their negotiations as to how they intended the price of water supplied to the plaintiff council by the defendant corporation to be calculated; but, as each party only had power to contract under seal, no legally enforceable agreement could be made until a contract under seal was executed.
Held: The language of the contract bore the meaning for which the plaintiff council contended, so that its alternative claim to rectify the wording did not arise. Rectification may be granted in cases in which the instrument sought to be rectified constitutes the only agreement between the parties, but does not reflect their common intention. An antecedent binding and concluded contract is not a pre-requisite to rectification for common mistake. If necessary, he said that he would have been prepared to remedy an instrument of agreement entered into between the parties on the 6th May 1912 to give effect to the concurrent intention of the parties as evidenced by a prior provisional agreement drawn up and signed by them on the 4th April 1912 despite the fact that this prior agreement, not having been under their seals, was not legally binding and despite the fact that the parties had decided to add into the final agreement an arbitration clause not present in the provisional agreement. Had it been necessary for him to decide on the rectification point (which it ultimately was not because he interpreted the final agreement of 6th May 1912 in favour of the plaintiffs) he would: ‘have felt bound to hold that the proof in the present case that the concurrent intention of the parties was, at the moment of execution, to contract on the footing of the 540l being a sum per annum and the 450,000 Gallons a yield per diem would have made it necessary (but for my construing the instrument as I have construed it) to rectify the instrument so as to accord with that concurrent intention, notwithstanding that the parties can be bound only by their respective seals’
Judges:
Clauson J
Citations:
[1936] Ch 375
Jurisdiction:
England and Wales
Cited by:
Approved – 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 – 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: 17 July 2022; Ref: scu.472859
