Michael was instructed to represent the Claimant, a car dealership, in an unusual claim for rectification of a written contract relating to the sale of a motor vehicle. The Defendant owned a Bentley and wished to part exchange it towards the purchase of a new Range Rover. The Bentley was subject to existing finance on a hire purchase agreement. After negotiations, a standard form contract was signed at the Claimant’s premises by its employee and the Defendant personally. Unfortunately, the written contract expressly stated that there was to be no payment by the Defendant of the existing finance on his Bentley and therefore it became apparent to the Claimant some months later that there was a substantial shortfall which had to be paid.
At trial, in the Birmingham County Court, Michael submitted that the contract could be rectified by the Court on the basis of a common mistake or, in the alternative, a unilateral mistake of which the Defendant had been aware. It was argued that the written contract did not represent the settled intentions of the parties and did not reflect their true agreement as it had always been intended that the finance on the Bentley would be paid by the Defendant. The Defendant denied that any remedy was due to the Claimant and denied liability for the shortfall on the contract.
After reserving judgment in light of the complex legal issues in the case the Judge found in favour of the Claimant and concluded that the written contract could be rectified on the basis of a common mistake. The Judge awarded the Claimant the full value of the shortfall and costs.
A claim for rectification of a written contract is rare and the legal criteria for success are strictly applied. However, this case demonstrates that a written document is not necessarily the final word on what the contract itself was for; there is sometimes room to demonstrate a contrary intention and achieve a remedy despite the clear words of the written agreement.