Lloyd's Maritime and Commercial Law Quarterly
COMMON INTENTION AND RECTIFICATION FOR COMMON MISTAKE
James Ruddell*
Recent decisions have suggested that a contract can be rectified for common mistake even when the parties had different subjective intentions at the time of entering the written agreement. It is sufficient, according to this view, to find a prior objective accord (which need not amount to a binding contract). This article argues that this approach is misguided. When there is no binding contract prior to the execution of the written instrument, rectification for common mistake can be justified only if there was a subjective common intention at the time of execution.
I. INTRODUCTION
A written contract can be rectified when, by common mistake, it fails to record accurately the continuing common intention of the parties. That simple proposition of law belies the complexity that continues to afflict the remedy of rectification. This article directs itself to examining what is meant by “common mistake” and “common intention” and argues that the approach recently adopted by the English courts is flawed.
It is possible to identify two general approaches to rectification for common mistake.1 The first, often termed the “subjective approach”, considers rectification to be justified
* Merton College, Oxford; Barrister and Solicitor of the High Court of New Zealand. The author would like to thank Professors Peter Watts QC and Francis Dawson of The University of Auckland, and the anonymous referee for their valuable comments on earlier drafts. The usual caveats apply.
The following abbreviations are used in the footnotes:
Anson: J Beatson, A Burrows and J Cartwright, Anson's Law of Contract, 29th edn (Oxford University Press, Oxford, 2010);
Burrows, “Construction”: Andrew Burrows, “Construction and Rectification”, in Andrew Burrows and Edwin Peel (eds), Contract Terms (Oxford University Press, Oxford, 2007);
Cartwright, Misrepresentation: John Cartwright, Misrepresentation, Mistake and Non-Disclosure, 3rd edn (Sweet & Maxwell, London, 2012);
Chitty: HG Beale et al (eds), Chitty on Contracts, 31st edn (Sweet & Maxwell, London, 2012);
Hodge, Rectification: David Hodge, Rectification (Sweet & Maxwell, London, 2010);
McMeel, Construction: Gerard McMeel, The Construction of Contracts, 2nd edn (Oxford University Press, Oxford, 2011);
Snell's Equity: John McGee QC et al (eds), Snell's Equity, 32nd edn (Sweet & Maxwell, London, 2010);
Spry, Equitable Remedies: ICF Spry, The Principles of Equitable Remedies, 8th edn (Pyrmont, NSW, 2010);
Story, Commentaries: Story, Commentaries on Equity Jurisprudence as Administered in England and America (1886).
1.See Leonard Bromley, “Rectification in Equity” (1971) 87 LQR 532; Marcus Smith, “Rectification of contracts for common mistake, Joscelyne v Nissen, and subjective states of mind” (2007) 123 LQR 116; and David McLauchlan, “The ‘Drastic' Remedy of Rectification for Unilateral Mistake” (2008) 124 LQR 608.
McLaughlan has subsequently discussed his views in more detail in McLaughlan, “Refining Rectification” (2014) 130 LQR 83. This appeared while the present article was in press, so it has not been possible to address the specific points he makes.
COMMON INTENTION AND RECTIFICATION
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