The main building was left out of the contract provisions in the missives and the disposal that transferred the title, which the solicitors involved in the transaction referred to as a “catastrophic blunder.” The same law firm represented both the buyer and the seller, and neither the lawyers nor the parties to the transaction were aware of the mistake. Over 20 years after the sale, the problem wasn’t brought to light until the seller’s daughters contested the buyer’s usage of the property. What transpired, then?

A party seeking to correct a written contract may apply to the court for rectification under section 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 when the written contract, including one set forth in missives or a disposition, fails to accurately express what the parties have agreed.

Rectification will retroactively correct the contract, but there is a high bar that must be cleared by the parties before the court may issue an order for rectification. The existence of an agreement between the parties previous to the establishment of the contract, in which the parties had a common aim, must be proven on the balance of probability.

On August 7, 1995, the buyer submitted an offer to buy a farm steading along with two blueprints defining the relevant piece of property, one of which identified the farming area and the other which identified the structures and a portion of the steading. The farm steading and some nearby acreage would have been given to the buyer if the offer had been accepted. But following talks concerning the pertinent areas to be covered by the sale, a letter of qualified acceptance dated August 24, 1995, was sent. Due to the fact that there was only one attached plan defining the transaction’s subject matter—the plan pertaining to the agricultural land—the farmsteading was not included in the sale.

The purchaser did not acquire title to the farm steading as described in the initial offer to purchase since the disposal that was then produced and signed only reflected the land as identified in the qualified acceptance letter dated August 24, 1995. This sparked a disagreement about whether or not the farm steading should have been included in the transaction in 1995.

The court had to decide, among other things, whether the missives as they were written failed to adequately convey the parties’ agreement on the land to be acquired and sold and if the disposition failed to give effect to the agreement made over that land.

Lord Turnbull noted that compelling the court to accept rectification required strong proof. But those involved in the 1995 deal were either unable to testify or had limited recollection of what happened, and the lawyers’ records had been destroyed. Despite this, Lord Turnbull concurred that the evidence showed that there had been a prior understanding and shared intention that the farm steading should be transferred to the buyer, which the missives and disposition finally failed to adequately reflect. The farm steading had been a crucial component of the offer for the buyer, and with the seller’s knowledge and active engagement, the buyer had seized ownership and transformed the steading.

The parties had not previously discussed the farm steading being excluded from the sale, and there was no indication that they had since changed their minds. Lord Turnbull claimed that the strength of this evidence was sufficient to dispel any concerns raised by the seller’s signatures on the disposition.

Notable is that the farmsteading was excluded from the qualified acceptance and subsequently the disposition, which the parties’ solicitor acknowledged was a “catastrophic blunder.” The solicitor who represented each party, according to Lord Turnbull, “would perhaps have a better knowledge of what the parties to the transaction had in mind to agree.” If the solicitor had been unable to testify, it is doubtful that the court would have made the same decision.

However, this decision is a good reminder that rectification actions only succeed where it can be conclusively established that the parties’ intentions were different from those set forth in the written contract.

If you’re looking to get assistance in rectifying any missives.