Reformation is an equitable remedy whereby the Court of Chancery will modify a written agreement to reflect the "true" intent of the parties. To obtain reformation, a party must establish by clear and convincing evidence that the written contract does not reflect the actual intent of the parties as a result of fraud, mutual mistake or unilateral mistake plus fraud by the other party. Reformation is not a means for courts to rewrite parties’ agreements. Rather, it is a way for courts to modify an agreement so that it conforms with the parties’ prior, actual intent.

Nonparties to a contract generally have no rights under the contract. There is an exception, however, for third-party beneficiaries. A nonparty is a third-party beneficiary if the contracting parties intended to benefit the nonparty through the contract, the benefit is intended to serve as a gift or in satisfaction of a pre-existing obligation to the third party, and the benefit to the third party was a material part of the contract. This raises the question of whether a third-party beneficiary may seek reformation of a contract. In the context of insurance policies, the Court of Chancery has answered that question in the negative in its 1987 decision inMalone v. United States Fidelity and Guaranty Co. , holding that a third-party beneficiary had no standing to reform a contract between the insured and his insurance company.

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