Contract Reformation

When drafting contracts and other written agreements, there are occasions in which, through a mutual mistake of the parties, the writing does not accurately set forth the terms of the agreement and comport with the intention of the parties. In such cases, it is possible for a court to equitably reform a contract. For a mistake to give rise to a reformation, it must be mutual. Thee parties must “have done what neither intended.” State ex rel. State Highway Comm’n v. Schwabe 335 S.W.2d 15, 19 (Mo. 1960). Reformation is not limited to “minor errors” such as clerical errors, misnaming a party, mistaken legal descriptions or another general mistake in the specific term of the writing. Indeed, it is sufficient that the parties agreed to accomplish a particular objective by the writing, and that the writing as executed is insufficient to effectuate the intention.
The specific elements of reformation are: (1) the existence of an actual, preexisting agreement and (2) a mutual mistake made by the parties to the agreement. Cardinal Partners, LLC v. Desco Inv. Co., 301 S.W.3d 104, 110 (Mo. Ct. App. 2010). When deciding whether a reformation is appropriation, one can rely on circumstantial evidence as long as the reasonable inferences prove the mutual mistake. Furthermore, relevant factors that may be considered include, without limitation, the “wording of the contract [or agreement] as signed by the parties, the subject matter of the contract…the circumstances surrounding the execution of the contract [or writing] and its interpretation by the parties. Everhart v. Westmoreland, 898 S.W.2d 634, 638 (Mo. Ct. App. 1995).
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