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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
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