Rectification

Question 1

traditional vs modern rectification

Answer 1

The traditional rule was to permit rectification only in cases of mutual mistake, but it is now available for cases of unilateral mistake.

Question 2

What is rectification?

Answer 2

• Rectification is an equitable remedy whose purpose is to prevent a written document from being used as an engine of fraud or misconduct equivalent to fraud.
• I.e., A mistake in how the contract was written down, not the contract itself
• The Court’s purpose is strictly corrective, not speculative.

Question 3

Test for rectification in cases of unilateral mistake

Answer 3

To warrant rectification, the plaintiff must establish by “convincing proof” (higher than the civil standard, but lower than the criminal standard) that (Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd.)
1. There was a prior oral contract whose terms are definite and ascertainable.
2. The terms orally agreed to were not written down properly
3. At the time of execution of the written document, the defendant knew or ought to have known of the error and the plaintiff did not.
4. The defendant’s attempt to rely on the erroneous written document must amount to “fraud or the equivalent of fraud.”

Question 4

Test for rectification in cases of mutual mistake

Answer 4

To warrant rectification, the plaintiff must establish on a balance of probabilities using clear, convincing, and cogent evidence that (Canada (Attorney General) v. Fairmont Hotels Inc.):
1. There was a prior agreement whose terms are definite and ascertainable.
2. The agreement was still in effect at the time the instrument was executed.
3. The instrument fails to accurately record the agreement.
4. The instrument, if rectified, would carry out the parties’ prior agreement.

Question 5

Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd.

Answer 5

Rectification is warranted here because the four criteria for unilateral mistake were met (convincting proof standard). However, this equitable remedy is awarded at the discretion of the Court; negligence is not an absolute bar to rectification.

Question 6

Canada (Attorney General) v. Fairmont Hotels Inc.

Answer 6

• Rectification is not warranted here because the four criteria for mutual mistake were not met. The plaintiff must establish rectification on a balance of probabilities using evidence that is clear, convincing, and cogent.