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Section 2 - rectification? Print
Section 2 Law of Property (Miscellaneous Provisions) Act 1989 says that any contract for the sale of land must (i) be in writing, (ii) incorporate all the terms the parties have expressly agreed in one document, and (iii) be signed by both sides.

The purpose of s2 is, of course, to ensure clarity and to avoid arguments over what was agreed. But, the court does have a residual power of rectifi cation, which allows it to correct mistakes.

Typically, rectifi cation will apply when the written document does not contain all the terms expressly agreed, due to a mistake in the recording of the agreement (eg words were wrongly omitted; words were wrongly included; the right words were used but the meaning or legal effect was misunderstood by the parties). In such situations, the court will rectify a document so that it does comply with s2. But, there is a limit to this and a recent case shows that rectifi cation may not always be available when the parties omit certain items from the documentation. In this particular case, there was an informal document, and both sides deliberately agreed that they would not include details of how the price was to be apportioned. As such, it did not comply with s2 and was therefore defective. But, the court refused rectifi cation, saying that it was not available because the parties had deliberately intended to exclude those key provisions from the documentation; in effect, they had both signed the document that they had intended to sign, rather than there having been any mistake as to the wording of the document. Accordingly, it was beyond the scope of the court to write into an agreement the very term that the parties had agreed should not be included in it!

The principle of this decision seems fair enough, but we would be wary of relying on it (the particular facts of the case were unusually confusing and the judge may well have felt that the whole situation was too chaotic for him to come to any other decision). Oun v Ahmad [2008] EWHC 545 (Ch). © Practical Lawyer

May 2008
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