Roodt Inc South Africa
Block A 7 Eton Road Sandhurst Johannesburg
Tel +27 11 685 0000
info@roodtinc.com
Johannesburg Office
JOHAN ROODT
jaroodt@roodtinc.com
UK Office
JOHN COHEN
jcohen@roodtinc.com

Rectification of a contract

A person who enters into a contract (a legally binding agreement) is obliged to carry out the obligations imposed on him by that contract.

But what is the situation where he signs a written contract and then, on later reading, he finds that it does not mean what he thought it meant? Does the law allow him to withdraw from the contract?

The answer to that question is a simple "no" - unless that person can show that the other party to the contract misled him into signing it.

However, the situation is different where the party who is unhappy with the contract he has signed can show that, in the form in which it is written, it does not in fact express the intention of all the parties to the contract. In those circumstances, the aggrieved party can apply to court for "rectification" of the contract, in which he asks the court to change the words of the contract to reflect the true intention of all the parties to it.

It is fundamental, therefore, that "rectification" of a contract does not mean amending or varying the contract - it is a procedural device to re-word a written contract so that it accurately reflects the intention of all the parties to it.

This is a very useful legal process. The onus of proof will be on the person claiming rectification to show that the contract, as written, does not reflect the intention, not only of himself, but of all the other parties to the contract. And that can be a difficult onus to discharge.

The other extremely valuable aspect of a claim for rectification of a contract is that (as was recently held by Cape High Court in Protea Property Holdings (Pty) Ltd v Boundary Financing Ltd) the right to rectify a contract does not prescribe. ("Prescription" means the extinguishing of a claim if the claimant does not institute legal proceedings to enforce it within the prescriptive period - which is usually three years.)

So, unlike a money debt, which will prescribe within three years of its becoming due if the creditor does not enforce it, a claim for rectification of a contract can be brought many years after the contract was entered into.

Once the contract has been rectified, any of the parties to it can demand that the other parties to the contract carry out their obligations in the manner laid down in the rectified contract.

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