What is "Rectification" in Contract Law? 4: Evidence Required

Previous posts: Definition of Rectification; unilateral mistake; mutual mistake.

We conclude our four-day examination of the law of rectification with an analysis of how a party actually goes about proving its case, and how the court will determine whether or not they succeed.

The court will consider:

• all the relevant documents [Clarke v. Thermidaire, (fn1), ¶26 and Royal Bank v. El-Bris, (fn2), ¶ 20-22];
• the oral evidence of the parties and/or witnesses, including the key issue of whether the oposing sides are in agreement or have differing versions of the facts [Clarke v. Thermidaire, (fn1), ¶ 26]
• the later conduct of the parties, [Royal Bank v. El-Bris, (fn2), ¶ 32].

Please note that:

1. When the court considers oral evidence it is doing something that it rarely does in contract cases: outside (also called "extrinsic") evidence to contradict or add to the terms of a contract is normally not allowed. (This is called the "parol evidence rule".) However, parol evidence is permitted in rectification cases. [Royal Bank v. El-Bris, (fn2), ¶ 24].
2. A court may order rectification even if the testimony of the party seeking rectification is not corroborated by the documentary evidence. [Royal Bank v. El-Bris, (fn2), ¶ 24; Sylvan, (fn2), ¶ 43.]
3. The judge need not specifically use the word "rectification" to apply the doctrine of rectification. [Royal Bank v. El-Bris, (fn2), ¶ 6.]

A caution!
The doctrine of rectification is not an everyday thing. "[P]arties, especially experienced and sophisticated parties, cannot routinely look to this remedy to correct mistakes in signed contracts." The courts have been consistent in their cautions against "opening the floodgates". [Royal Bank v. El-Bris, (fn2), ¶ 35.]

Footnotes:

fn1 - H.F. Clarke Ltd. v. Thermidaire Corp. Ltd., [1973] 2 O.R. 57 at 64 - 65 (C.A.), [reversed on other grounds 1974 CanLII 30 (S.C.C.), [1976] 1 S.C.R. 319].

fn2 - Royal Bank of Canada v. El-Bris Limited, [2008] 92 O.R. (3d) 779 (C.A.).

fn3 - Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club, 2002 SCC 19 (CanLII), [2002] 1 S.C.R. 678 (S.C.C.)