Rectification—unilateral mistake

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

  • Rectification—unilateral mistake
  • When is rectification available?
  • Capitalising on another party’s failure to understand effect of drafting
  • Errors of judgment

Rectification—unilateral mistake

This Practice Note considers the remedy of rectification for unilateral mistake. For rectification for common mistake, see Practice Note: Rectification—mutual mistake.

When is rectification available?

Rectification for unilateral mistake is available where one party makes a mistake in a document, the other party is aware of the error in their favour, and unconscionably takes advantage of it. Three elements must be present:

  1. by the claimant’s mistake the agreement did not give effect to their subjective intention at the time of execution

  2. there was no mistake by the defendant

  3. the defendant was aware of the claimant’s mistake at the time of execution, and there was unconscionable behaviour by inducing execution or by standing by and allowing it

In Littman v Aspen Oil there was an error in a mutual break clause, which wrongly stated that exercise of the landlord’s (rather than tenant’s) break would be conditional on the tenant complying with all of its lease covenants. On the face of it, that error left the tenant free to exercise its break without precondition. When the tenant exercised its break the landlord claimed that the lease ought to be:

  1. construed so that exercise by the tenant of its break right was conditional on compliance by the tenant with its covenants, or

  2. rectified on the grounds of the landlord's unilateral mistake

The Court of Appeal found in favour of the

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