Rectification of Instruments

In one line

Where the document says something the parties never agreed, rectification corrects the document to match the bargain, and then the corrected document can be enforced.

In the words a student can write in an exam: section 26 of the Specific Relief Act 1963 provides that where, through fraud or a mutual mistake of the parties, a contract or other instrument in writing does not express their real intention, either party or his representative in interest may sue to have it rectified, or may claim rectification in a suit in which a right under the instrument is in issue, and a defendant in such a suit may also ask for it. The court may, in its discretion, direct rectification so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value; a contract may be first rectified and then specifically enforced; and no relief shall be granted unless specifically claimed.

Why the remedy exists

Written contracts are drafted by people, and people make mistakes. The parties agree on one thing and the deed records another: a wrong survey number, an omitted right of way, an interest rate that reverses what was settled.

The law's starting position is that a signed document speaks for itself, and rightly so: commerce depends on being able to rely on the writing. But rigidly applied that rule lets a party take advantage of an error he knows about, or a fraud he committed.

Rectification resolves the tension by a narrow remedy. The court does not remake the bargain; it makes the document say what the bargain always was. That is why the grounds are only two, why the intention must have been common, and why third parties who relied on the document in good faith are protected.

The provision itself

"(1) When, through fraud or a mutual mistake of the parties, a contract or other instrument in writing (not being the articles of association of a company to which the Companies Act, 1956 applies) does not express their real intention, then

(a) either party or his representative in interest may institute a suit to have the instrument rectified;

(b) the plaintiff may, in any suit in which any right arising under the instrument is in issue, claim in his pleading that the instrument be rectified; or

(c) a defendant in any such suit as is referred to in clause (b), may, in addition to any other defence open to him, ask for rectification of the instrument.

(2) If, in any suit in which a contract or other instrument is sought to be rectified under sub-section (1), the court finds that the instrument, through fraud or mistake, does not express the real intention of the parties, the court may, in its discretion, direct rectification of the instrument so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value.

(3) A contract in writing may first be rectified, and then if the party claiming rectification has so prayed in his pleading and the court thinks fit, may be specifically enforced.

(4) No relief for the rectification of an instrument shall be granted to any party under this section unless it has been specifically claimed:

Provided that where a party has not claimed any such relief in his pleading, the court shall, at any stage of the proceeding, allow him to amend the pleading on such terms as may be just for including such claim."