![]() ![]() If they are wrong, then you may have an avenue to rectify the error. So, make sure you do not blindly rely upon your precedents and cut and paste away, or think “near enough is good enough”. limitation on certain courts to issue equitable relief, admissibility of evidence in equity but nor at common law, etc.) The rectification doctrines at law and in equity may appear similar but remain conceptually distinct and there are some very large obstacles in terms of which one you can rely upon (e.g. This high standard of proof requirement is to allay concerns that equity may undermine the integrity of written agreements. ![]() However, in order to be afforded relief via equity, a high standard of proof must be achieved to show a common intention. Justice Leeming conveyed that “In Australia, a contract may be rectified in equity where it is shown that there was at the time the document was executed, a common intention which, through a common mistake, was not reflected in the document.” If you cannot clearly satisfy these two conditions then you may be able to rely on the “rectification in equity”. that it is self‐evident what the objective intention is to be taken to have been.that the literal meaning of the contractual words is an absurdity and.Justice Leeming in Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) NSWCA 11 provided an excellent summary of “rectification by construction” and “rectification in equity”.Īt common law the court has an inherent power “if the error is clear, and it is also clear what a reasonable person would have understood the parties to have meant, then the mistake may be corrected as a matter of construction.” However, two conditions are necessary in order to correct the contractual language in this manner: However, all is not lost if you made an error, the Court could provide relief by rectifying the error. Obviously, you do not want to be relying on such avenues and the ideal thing is to get the contract correct in the first place. There are various common law and equitable (mistake, non est factum, misrepresentation, misleading and deceptive conduct, proprietary estoppel, rectification, etc.) and legislative avenues which can be used to set aside and, in some circumstances, re-write certain “unfair contract terms” ( Australian Consumer Law) or limit a clause ( National Credit Code prohibits interest greater than 48%). The literal interpretation of a clause and contract is only the starting point for the Courts at law and equity. You would usually have the party who wants to get out of the contract or obligation open their argument with “Well, that is what the contract says, so, tough luck.”Ĭan I fix it, if the other side won’t agree to it? As you can see from the above examples this could cause some adverse, unfair or absurd outcomes. ![]() In contract, you start with interpreting the contract literally. ![]() “This contract is subject and conditional upon the preconditions of Clause being satisfied in full.” However, there is no Clause 9.32 because a preceding sub-paragraph was deleted and the formatting went awry.“Interest on your home loan is calculated at % per annum for the 300 term of the loan.” When they meant it to be 3.5% per annum for a 300 month term.whilst the rats may be outstanding, one would think they meant “rates”. “The parties are to make an adjustment of the purchase price to satisfy the outstanding at settlement.” Hmm….Pretty sure the landlord would not be happy to pay the tenant’s rent. Time and time again we see documents that are used regularly by clients and practitioners that have typographical errors in them – for example: However, with the ever-increasing reliance on computers and precedents, there is also the unfortunate negative aspect of blindly relying on precedents or systems to get things correct. Computers, workflows, practice management systems and greater access to precedents with boilerplate clauses has no doubt, in the majority, created greater efficiency and fewer errors in producing documents and enabled parties to gauge what is industry standard in their contractual dealings and terms. ![]()
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