In commercial law, we are often confronted with a situation in which a written instrument has been entered into which does not actually express the intention of the parties to the agreement. This writing can take the form of a contract, deed, mortgage, or other instrument in written form. In such a situation, equity has jurisdiction to reform the agreement to the mutual understanding of the parties. In such a situation, the job of the Court is not to rewrite the written instrument, but to determine from the evidence the intention of the parties as to the language that should have been included in the document.
The legal standard for reformation of a contract requires 1) a written agreement, 2) a mutual mistake (or fraud, or misrepresentation by a party and a mistake by the other party) and 3) proof by clear and convincing evidence. The clear and convincing proof standard is one which requires more than the typical “preponderance of the evidence” standard in most civil actions, but less than the high “beyond a reasonable doubt” standard used in criminal law.
A typical cause of action for reformation of a contract will set forth the facts of the making of the written agreement, the language of the agreement, the language that was actually intended by the parties, the mutual mistake, and the matter in which the parties’ performance of the written agreement will be affected due to the mutual mistake. Florida has long recognized the use of parol evidence to establish a mutual mistake. Parol evidence is extrinsic evidence from outside the language of the written agreement which discloses an ambiguity and clarifies or adds to the terms of the written agreement.
Causes of action for reformation of a deed must be brought within 20 years pursuant to Fla. Stat. s. 95.231(2). The statute of limitation for reformation of other written agreements would fall under the five year limitation for equitable actions founded on a written instrument under Fla. Stat. s. 95.11(2)(b). If it is claimed that the mutual mistake is based on fraud then the statute of limitation would be four years per Fla. Stat. s. 95.11(3)(j).