Also known as: reformation · reform · reformation of contract · equitable reformation
Written by attorneys · grounded in primary & secondary sources — see below
An equitable remedy that corrects a written instrument to reflect the parties' true agreement when a mutual mistake has caused the writing to diverge from their actual intent.
Devon Drake serves on the board of a nonprofit advocating changes to consumer protection statutes while representing Diamond Manufacturing in ongoing litigation. Drake knows a board decision could increase the company's potential recovery. Drake discloses the possible benefit to the client but does not name Diamond Manufacturing.
Danielle Dixon and Dover Bank negotiate a loan agreement containing an interest-rate formula both parties believe will track market conditions. Dixon fails to verify the formula's accuracy before signing. The formula later produces an unintended windfall for the bank. Dixon seeks reformation despite her oversight.
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Dorothy Daniels's will leaves her donor-advised fund at Helping Hands to one charity but omits a second account opened under a similar name. Clear evidence shows Daniels always treated both accounts as a single charitable resource. The probate court reforms the will to include the omitted account.
Daniel Diaz and Duffy Construction contract for custom equipment using a pricing index both assume will reflect actual costs. The index later proves grossly inadequate. Reformation of the price term is considered when evaluating whether the mistake materially affects the agreed exchange.
Destiny Davis grants her agent power of attorney over endorsement deals. The agent and a sponsor sign a sponsorship agreement containing an exclusivity clause neither principal nor sponsor intended. The agent seeks reformation to remove the clause and restore the non-exclusive terms both parties originally agreed upon.
Diego Duarte and Diamond Manufacturing sign a supply contract that inadvertently includes an exclusivity clause neither party intended. Both believed the document reflected their oral understanding of non-exclusive rights. The court reforms the writing to remove the clause.
The court may reform the terms even if unambiguous when clear and convincing evidence establishes the transferor's intention and shows that a mistake of fact or law affected the instrument.
A mistaken party's fault does not bar reformation unless the fault amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
A court may reform the writing at a party's request when a mutual mistake as to the contents or effect of the writing caused the divergence, provided third-party rights such as those of good faith purchasers are not unfairly affected.
In determining whether a mistake has a material effect on the agreed exchange, a court accounts for any available relief by way of reformation, restitution, or otherwise.
…facial challenges to state statutes has been the subject of debate within this Court. Upholding the validity of the federal Bail Reform Act of 1984, the Court stated in United States v. Salerno that a "facial challenge to a legislative Act is, of course, the most difficult challenge to mount successfully, since the…