Reformation - Next Generation Bar Exam
- On which two grounds is reformation available?
- A mutual mistake in expressing the agreement, or one party's mistake induced by the other's fraud or known to the other. In either case, the writing fails to express what the parties actually agreed.
- The parties agree to sell 'Lot 12,' but the typed contract describes 'Lot 21.' What remedy corrects the contract?
- Reformation for mutual mistake in expression. The writing misstates the parties' actual agreement because of a clerical error.
- How does reformation differ from rescission?
- Reformation corrects and enforces the writing; rescission undoes the contract. A party seeking to enforce the true agreement asks for reformation, not avoidance.
- What is the purpose of reformation?
- To correct a writing so that it reflects the parties' actual prior agreement. Reformation enforces the bargain the parties actually made, not a new one created by the court.
- How does the parol evidence rule apply to a claim for reformation?
- It does not bar evidence offered to prove the mistake. Reformation by definition seeks to show that the writing does not reflect the agreement.
- What must exist before a court will reform a writing?
- An actual prior agreement that the writing fails to express. Without a prior agreement, there is nothing for the corrected writing to reflect.
- Under the Restatement (Second), what effect does the requesting party's failure to read the writing have on reformation?
- It does not bar reformation. Ordinary negligence in failing to read is not a defense unless it amounts to a failure to act in good faith.
- Whose rights limit the availability of reformation?
- Good-faith purchasers for value and other third parties who relied on the writing. Reformation will not be granted to the extent it would unfairly affect such third parties.
- What standard of proof applies to a claim for reformation?
- Clear and convincing evidence. The heightened standard protects the reliability of written agreements.
- The parties never agreed on the location of a boundary; each assumed a different line. On what ground is reformation unavailable?
- There was no prior agreement for the writing to reflect. Reformation corrects a writing to match an agreement; it cannot create one.
- How does the statute of frauds apply to a claim for reformation?
- It does not bar reformation of a writing to reflect the agreement. The corrected writing satisfies the statute, and the court will not let the statute shield the mistake.