Under New York law, reformation of contract is an equitable remedy allowing the court to rewrite a contract that does not accurately reflect the mutual intentions of the parties. Where the contracting parties agree to modify the contractual language, litigation is not needed. However, where the proposed reformed language benefits one party to the detriment of the other, litigation often ensues. To seek reformation of a contract, a party must show either a mutual mistake made by both parties or a unilateral mistake by one party caused by the fraudulent behavior of the other.

This column focuses on the first ground for seeking reformation, mutual mistake and addresses recent Commercial Division decisions that have struggled with that issue. A mutual mistake exists where the contractual language does not reflect the parties’ meeting of the minds in some material respect. To prevail on a reformation claim based on mutual mistake, the party advancing the claim must prove a mutual mistake by both parties that resulted in either (1) an omission of an agreed upon provision or (2) the addition of a provision not agreed upon. Slutzky v Gallati, 97 A.D.2d 561, 561 (3d Dep’t 1983).

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