High Court Rectifies Mistake in Waste Recycling Contract
25th April 2017Back to articles
Even the most experienced contract negotiators can make mistakes but, happily, the courts have power to put them right if the true intentions of the parties can be clearly discerned, as was illustrated in a recent case in which the High Court rectified a sloppy error in a waste recycling contract.
Following a tendering exercise, a company had been awarded the 15-year contract by a local authority.
Given the profitability of the recycling business, the company was to pay £500,000 annually to the council. The company's final tender included a document that made provision for that sum to rise each year with inflation.
However, when the final contract documents were put together by the council's consultants, an earlier and incomplete version of the document, which contained gaps and made no reference to indexation, was included.
The mistake was not picked up until after the contract was signed. In the circumstances, the council issued proceedings with a view to correcting the error.
In upholding the council's arguments, the Court noted that the gaps in the earlier version of the document would render the contract inoperable. It was self-evident that a common mistake had been made and that, had anyone on either side spotted it prior to completion of the contract, they would not have stayed silent.
There had clearly been a common intention that indexation would apply and the council had not subsequently acquiesced to the mistaken position. In the circumstances, the Court ordered rectification of the contract so as to replace the document with the later version.
Whilst such mistakes are regrettable, if a contract does not reflect the intentions of the parties to it, the court can order it to be rectified. We can advise on any contractual matter and assist you to get your contracts right first time.
For information and advice on all your business needs contact us at any of our offices listed below:
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