Rectification

• Rectification occurs when the parties to a contract revise their agreement to reflect the original terms upon which they agreed. An agreement can be rectified if the errors in the document occurred by mistake and one or both parties were not aware of it. Once the document reflects the conditions that were mutually agreed upon by the parties, they can continue their transactions as they originally intended.
  
  

Equitable Remedy

• A rectification agreement is an equitable remedy provided in contract law that requires the parties to perform specific acts. When a court grants rectification, requesting the losing party to pay damages may not be sufficient or appropriate. Given the circumstances of the case, the most suitable remedy would be for the contract to be changed to accurately reflect the obligations of the parties.
  
  

Types of Contracts

• Rectification is used as a remedy for disputes involving commercial contracts, shareholder agreements and real estate transactions. It is also used for contracts that have serious taxation consequences. When there are errors regarding essential terms for those types of contracts, it can lead to unforeseen issues regarding vendor obligations, shareholder compensation or title rights, for example. In those situations, the agreements need to be corrected.
  
  

Legal Requirements

• The party that filed the lawsuit, known as the claimant, must satisfy certain legal requirements to be granted rectification. The claimant must submit evidence that demonstrates the true intention of the parties. The claimant has to show the discrepancy between the intent and actions of the parties and the terms of the disputed contract. The claimant also has to prove that the issue being contested was supposed to be included in the original contract.
  
  

Procedure

• When rectification is ordered by the court, there are certain changes that may be implemented. Rectification may involve merely changing dates in the contract, or it could include clarification of certain terms. It could also mean that clauses will be included or retracted from the contract. When the contract has been properly rectified, it should accurately reflect the common intent of the parties and their future transactions should be carried out accordingly.