Rectification of guarantees
Rectification of guarantees

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Rectification of guarantees
  • The Statute of Frauds
  • Interpretation
  • Common or mutual mistake
  • Common intention
  • Extrinsic evidence

Rectification is an equitable remedy by which the court can correct an error of expression where a written document does not match the parties' intention. It is available only in relation to written contracts and other documents. An oral agreement cannot be rectified.

The Statute of Frauds

Under the Statute of Frauds 1677, a contract of guarantee is only enforceable if it, or a memorandum or note of it, is in writing and signed by the guarantor or his agent. Rectification is, in principle, available even in relation to guarantees. There is nothing in the policy underlying the Statute of Frauds to prevent it.

However, where there is a genuine dispute as to the existence of the guarantee or precisely what has been agreed, the court will be slow to deprive a defendant of a legitimate statutory defence on the basis of contested oral evidence alone, as this would undermine the protection that the Statute of Frauds was designed to confer.

Interpretation

The starting point in considering a claim for the correction of an error is to ask whether the error can be solved by means of interpretation rather than rectification. At common law, rectification was not available and so the only way in which an error of expression could be corrected was by applying the ordinary rules of interpretation.