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Reformation: Definition, Example and Related Terms

What is a Reformation ?

In the world of business and contracts, 'Reformation' is a term that refers to the process of changing or modifying a contract when its terms are found to be incorrect, unfair, or do not accurately reflect the agreement made between the parties involved. The goal of reformation is to ensure the contract meets the true intentions of the parties. It's like fixing a typo or misunderstanding in a contract, but on a larger scale. It's not about changing your mind about a deal, but about making sure the contract matches what everyone agreed to in the first place.


  • Scenario Description
    Imagine a company called 'BakeWell Ltd.' signs a contract to deliver 1000 pies to another company, 'EatWell Inc.' every month for a year. However, BakeWell Ltd. discovers there's a mistake in the contract and it states 10,000 pies instead of 1,000 pies per month. In such a situation, BakeWell Ltd. can request a reformation of the contract. This would involve going to court and proving that there was a mistake in the contract that does not reflect the actual agreement between BakeWell Ltd. and EatWell Inc. If successful, the contract would be changed or 'reformed' to state the correct number of pies - 1,000 pies per month.
    Consider a software development company, 'DevTech', enters into a contract with 'BizSolutions' for creating a custom software. The contract terms state that DevTech should complete the project in 6 months, while the actual agreement was for a 12-month period. This is another case where reformation comes into play. DevTech can seek legal action to reform the contract, demonstrating that there was a mutual mistake and the actual development timeline agreed was 12 months, not 6 months. If the court agrees, the contract would be reformed to reflect the correct timeline.