When and How is Contractual Reformation Used?

As a general rule, courts want to enforce your contractual agreements—not rewrite them for you, or interpret what you meant when you write something inaccurate or incorrect in a contract.

But the law also recognizes that mistakes happen, particularly when writing contracts, and sometimes, those mistakes need correcting.

What Did the Parties Mean?

It sometimes happens that the contract that is ultimately drafted and accepted by the parties, is different from what the parties’ understandings were—that is, the contract doesn’t reflect important information about the agreement.

Reformation is not used to add or take away things that weren’t included in the original agreement. Rather, it is to modify terms or parts of a contract, to bring them in line with what the parties meant and intended when the contract was drafted.

Reformation does not alter the fundamental nature of the agreement or the parties’ obligations under it, except to the extent that the reformed language may change any of that.

Rather, it is asking the court to interpret a contract in a way consistent with the parties original understandings.

Reformation can happen when circumstances outside the contract change, or when laws change, thus necessitating an alteration of the agreement to keep its terms consistent. It can also happen when there are pure errors—for example, misnaming the name of a party or person or a business, or correcting a technical term in the agreement.

Similarity to Other Defenses

Reformation is similar to things like mistake, or frustration of purpose, because an error may make the contract unenforceable, or make it impossible for a party to perform.

But those claims are defenses to performance under a contract, whereas reformation is not an attempt to get out of, or to invalidate, a contract. Reformation says that a party wants to perform under an agreement—but the agreement is incorrect as written.

Sometimes, fraud claims get included, with one side saying the contract simply accidentally has an error, but the other side claiming that any error or omission was purposeful, and thus, fraudulent.

Winning Your Case

Of course, to win on a claim for reformation, you need to show the court that the contract has some error or omission, and that the mistake or error or omission was not intentional.

Reformation is not easy to get. To have a court grant a reformation request, the party asking for the reformation must win the case by clear and convincing evidence, a higher standard than what is used in most civil cases.

If parties agree there is an error in a contract they can, on their own, alter the terms of the agreement by mutual consent. But reformation is for when one party feels there has been an error or omission in the drafting of the agreement, but the other party disagrees, and believes that any error or omission is not just a simple error, and that the contract should be left the way that it is.

Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954-440-3993 for help with your commercial litigation case.

Source:

floridabar.org/the-florida-bar-journal/more-than-you-wanted-to-know-about-the-doctrine-of-reformation/