• Rectification
Where
the written document fails to state the actual intentions of the parties, it may
be altered under the equitable doctrine of rectification. In Joscelyne v Nissen the plaintiff agreed to
transfer his car hire business to his daughter, in return for her agreeing to
pay certain household expenses, although this was not stated in a later written
contract. The father was entitled to have the agreement rectified to include
the terms agreed.
•
Non est factum
Where
a party signs a contract, they will usually be bound by its terms. It is assumed
that the signatory has read, understood and agreed to the terms as stated, and
the courts are generally reluctant to interfere in such circumstances. Where, however, someone signs a document under
a misapprehension as to its true nature, the law may permit them to claim non
est factum, that is, that the document is not their deed. Originally, the
mistake relied on had to relate to the type of document signed, but it is now
recognised that the defence is open to those who have made a fundamental
mistake as to the content of the document they have signed. However, the person
signing the document must not have been careless with regard to its content. In
Saunders v Anglia Building Society Mrs Gallie, a 78 year old widow, signed a
document without reading it, as her glasses were broken. She had been told, by
a person named Lee, that it was a deed of gift to her nephew, but it was in
fact a deed of gift to Lee. Lee later mortgaged the property to the respondent
building society. Mrs Gallie sought to repudiate the deed of gift on the basis
of non est factum. Her action failed; she was careless in not waiting until her
glasses were mended. Furthermore, the document was not fundamentally different
from the one she had expected to sign. She thought that she signed a document
transferring ownership and that was the effect of the document. The conditions
laid down in Saundersfor non est factum to apply were confirmed in Avon Finance
Co Ltd v Bridger This decision can be contrasted with a later successful
reliance on the defence in Lloyds Bank plc v Waterhouse where the defendant,
who was illiterate, intended to provide a guarantee in relation to his son’s
purchase of a farm. In actual fact, the document he signed was a guarantee in
relation to all of his son’s liabilities. In the Court of Appeal, it was
decided that the father could rely on non est factum. He had not been careless
– he had questioned the extent of his liability – and the document was
fundamentally different from that which he had expected to sign.
MISREPRESENTATION
As
was seen in Chapter 6, a statement which induces a person to enter into a
contract, but which does not become a term of the contract, is a
representation. A false statement of this kind is a misrepresentation and
renders the contract voidable. The innocent party may rescind the contract or,
in some circumstances, claim damages
Misrepresentation can be defined as ‘a false statement of
fact, made by one partybefore or at the time of the contract, which induces the
other party to enter into the contract’. The following points follow from this
definition.
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