RECTIFICATION, MISTAKE AND UNCONSCIONABILITY

George Wimpey UK Ltd v VI Components Ltd [2005] EWCA Civ 77; [2005] All ER (D) 37 (Feb)

In George Wimpey UK Ltd v VI Components Ltd [2005] EWCA Civ 77; [2005] All ER (D) 37 (Feb) the Court of Appeal affirmed that the remedy of rectification operates within narrow limits. This is particularly so in the case of a unilateral mistake. The mere fact that a party has made a mistake, even a serious mistake, will not entitle that party to seek rectification of the contract. It is necessary to go further and prove that the other party to the contract knew of the mistake so that it can be said to have behaved dishonestly or unconscionably. Further, a party who alleges that the other party has behaved dishonestly must plead this clearly. Finally, where a company alleges that it has made a mistake evidence must be led by those responsible for making the decision on behalf of the company in order to show that the company was in fact mistaken. The fact that the contract has been negotiated by a person who is not the decision-taker and who has made an error is irrelevant unless it can be shown that the decision-taker shared the intention of the negotiator.