You’ve done the right thing. You’ve made an agreement and put it in writing. Both parties signed it. But what happens if you discover that the contract is wrong – it doesn’t represent the agreement you thought you made? Are you stuck with it simply because you signed it? Not necessarily. The courts have the ability to “reform” or rewrite a contract to be consistent with the actual agreement under very specific conditions.
It happens. People negotiate an agreement; write it down wrong (maybe without involving an attorney) and, for whatever reason, they both sign that incorrect document. Sometimes that mistake ends up favoring one of the parties and they are not willing to give up the benefit that falls into their lap. “Sorry, that’s what you agreed to. It’s right there in black and white. There’s nothing you can do,” they say. Is that true? Maybe. But maybe not. There are two circumstances in which a court may reform the written contract to make it consistent with the negotiated agreement: one is where both parties are mistaken and the other is where only one party is mistaken because the other party duped him into the mistake.
In the first case, the parties involved are mutually mistaken about their written agreement. It’s essentially “an honest mistake.” For example, suppose a seller has two cars for sale. One is a 2006 and the other is a 2008 model of the same car. The buyer discusses only the 2008 model with the seller and ultimately she agrees to buy it. Both of them know that the buyer means to buy the 2008 model but the written contract mistakenly identifies the 2006 model and neither party catches the mistake before signing. If seller were to insist that the deal was mistakenly for the car that the buyer didn’t want to buy, the buyer would likely have a claim to “reform” the written contract to change it to the one she wanted – the 2008 model.
But, what if the seller tricked our buyer into signing a contract to buy the wrong car? Here’s the second circumstance were there could be a case for reforming the contract. Suppose the 2008 model is red and the 2006 model is blue. The buyer wants the red car, but doesn’t know the model year. When negotiating the sale, both the buyer and the seller talk exclusively about the red car. The seller knows without a doubt that he agreed to sell, and the buyer agreed to buy, the red car and the red car is the 2008 model. The seller, however, intentionally prepares the written contract to indicate that the buyer is buying the 2006 (blue) model, with no mention of color. Or, the seller notices that he mistakenly listed the 2006 model in the contract but does not tell the buyer. In either scenario, if the buyer signs the contract without catching the difference, she could have a claim to reform the contract to specify the red car which has a 2008 model year.
Of course, in either case, the buyer would need proof that the seller had in fact agreed to sell to buyer the 2008 model and it was only by mutual mistake, or unilateral mistake coupled with fraud or some unfairness by the other party, that the contract identified the 2006 model.
The point here is that you are not necessarily stuck if it turns out that the written contract doesn’t end up representing fairly or accurately the parties’ actual agreement. It’s not automatic and it’s not an “out” of a written agreement. But, it does offer the possibility that you actually get what you thought you were getting.