Also known as: reform an instrument · reforming an instrument · reformed instrument · reformation · equitable reformation · instrument reformation
Written by attorneys · grounded in primary & secondary sources — see below
An equitable remedy by which a court corrects a written instrument to express the parties' true agreement when a mutual mistake has caused the writing to deviate from that agreement.
Rosa Ruiz and Roberto Reyes negotiated a supply contract intending a price adjustment clause tied to actual production costs. Their lawyer omitted the clause from the final draft, and both signed without noticing the omission. When costs rose sharply, Rosa sought reformation. The court granted it because her failure to catch the omission did not amount to bad faith.
Riverstone Manufacturing and Redline Automotive signed a licensing agreement that both believed contained a royalty cap. Pre-contract emails and drafts showed the cap, yet the final document omitted it. Riverstone sued for reformation. The court admitted the extrinsic evidence to establish the mutual mistake and reformed the writing.
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Raymond Ramos sold land to Regina Robinson under a contract both thought set a fixed price of $400,000. The writing instead contained an open-price term that later produced a much higher amount. Regina proved the mutual mistake materially altered the exchange. The court reformed the instrument to the intended fixed price.
Aluminum Company of America contracted with Essex Group using a pricing index both believed would track production costs. Electricity costs later spiked far beyond the index. Alcoa sought reformation of the price term. The court reformed the formula to restore the intended profit margin rather than rescind the entire deal.
Roland Rhodes sold property to Rita Russell under an agreement that she would take subject to an existing mortgage. The deed instead stated she would assume the mortgage. Both parties had intended the subject-to language. Rita obtained reformation so the deed matched the original deal.
Riverfront Developments granted Radiant Technologies an option to purchase land with a stated exercise deadline both parties believed fell on a business day. The date actually landed on a holiday. Radiant sought reformation claiming a transcription error. The court denied relief because the written date accurately reflected the agreed deadline and no mistake in expression existed.
A party's failure to discover a mistake does not bar reformation unless the conduct amounts to bad faith or a violation of reasonable standards of fair dealing.
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Evidence of prior negotiations and the parties' actual agreement is admissible to show that the writing fails to express the intended terms and to establish grounds for reformation.
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Reformation is available when the mistake concerns the contents or effect of the writing and reformation can restore the intended exchange without unfairly affecting third parties.
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Reformation remains available even when the underlying contract falls within the statute of frauds, provided the other requirements for reformation are satisfied.
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…a purely legal question having nothing whatever to do either with novation, as the district judge suggested, or reformation, as suggested by the respondents here. Such a defense goes to the question of just what, under the law, the contract between the respondents and petitioner is and, in an action to collect a…