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Chapter 5

Reformation of an instrument allows a court to revise a written contract to reflect the true intentions of the parties if there was a mistake. It requires a meeting of the minds but an error in reducing the agreement to writing. Annulment is appropriate if there was no meeting of the minds. Reformation is possible in cases of mutual mistake, unilateral mistake coupled with fraud/inequitable conduct, or mistake in drafting. It requires clear evidence of the actual agreement. Reformation does not apply to donations or wills as they lack the element of agreement. A party cannot seek reformation if they previously tried to enforce the flawed instrument. Either party can seek reformation if there was a mutual mistake, otherwise only the injured party.

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86 views2 pages

Chapter 5

Reformation of an instrument allows a court to revise a written contract to reflect the true intentions of the parties if there was a mistake. It requires a meeting of the minds but an error in reducing the agreement to writing. Annulment is appropriate if there was no meeting of the minds. Reformation is possible in cases of mutual mistake, unilateral mistake coupled with fraud/inequitable conduct, or mistake in drafting. It requires clear evidence of the actual agreement. Reformation does not apply to donations or wills as they lack the element of agreement. A party cannot seek reformation if they previously tried to enforce the flawed instrument. Either party can seek reformation if there was a mutual mistake, otherwise only the injured party.

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josieth santos
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Distinction between Reformation and

Chapter 5: Reformation of the


Annulment
Instrument
Reformation of the instrument presupposes a
meeting of the minds between the contracting
parties but their true intention is not expressed in the
Reformation - Is the remedy in equity by means of instrument.
which a written instrument is made or construed so
as to express or conform to the real intention of the Remedy of annulment is proper when there is no
parties when some error or mistake has been meeting of the minds.
committed.
- In reformation of the instrument, the courts When reformation may be sought
don’t attempt to make another contract for
the parties. 1. Mutual mistake of the parties – when it causes
the failure of the instrument to disclose the real
agreement, one of them may ask for reformation.
When reformation of the contract is necessary
2. One party was mistaken and the other acted
- There having been a meeting of the minds of fraudulently – if one party was mistaken and the
the parties to a contract, their true intention other acted fraudulently or inequitably in such a
is not expressed in the instrument purporting way that the instrument does not show their true
to embody their agreement, by reason of intention, the former may ask for reformation.
mistake, fraud, inequitable conduct or
accident, one of the parties may ask for the 3. One party was mistaken and the other
reformation of the instrument to the end that knowingly concealed the mistake – When one
such true intention may be expressed. party was mistaken and the other knew or believed
- If mistake, fraud, inequitable conduct of that the instrument did not state the real agreement,
accident has prevented the meeting of the but concealed that fact from the former, the
minds of the parties, the proper remedy is instrument may be reformed.
not reformation but annulment of the
4. Ignorance, etc. of the party drafting
contract.
instrument – When through the ignorance, lack of
skill, negligence or bad faith on the part of the
Requisites of Reformation person drafting the instrument or of his clerk or
typist, the instrument does not express the true
In order that the action for reformation will intention of the parties, the courts may order that the
prosper, the following requisites must concur: instrument be reformed.
1. Meeting of the minds 5. Mortgage or pledge written otherwise – If two
2. Written contract parties agree upon the mortgage or pledge of real or
3. Written contract fails to express the true personal property, but the instrument states that the
intention of the parties property is sold absolutely or with a right of
4. A clear convincing proof of the real repurchase, reformation of the instrument is proper.
intention
5. Failure is due to mutual mistake, fraud,
inequitable conduct, or accident
When reformation is not allowed
There shall be no reformation in the following
cases:
1. Simple donations inter vivos, wherein no
condition is imposed
2. Wills
3. When the real agreement is void

Reason for the law


- Donation is essentially an act of liberality whereas,
in case of a will which is not a contract, the
intention should be looked into from the words
itself alone and may not be changed after the lips of
the testator has been sealed by death.

Effect of action to enforce instrument


- When one of the parties has brought an action to
enforce the instrument, he cannot subsequently ask
for reformation

Party who can bring action for reformation


- Reformation may be ordered at the instance of
either party or his successors in interest, if the
mistake was mutual; otherwise, upon petition of the
injured party or his heirs and assigns.

Reporters:
Relano, Razelyn
Morecho, Deo Marie T.

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