Opinion ID: 1379283
Heading Depth: 3
Heading Rank: 2

Heading: Mistake as a Ground for Reformation

Text: Perhaps realizing the difficulty with applying the doctrine of mutual mistake to avoid only part of his lease, the lessee places heavy reliance on the equitable remedy of reformation as an alternative remedy that should have been permitted by the trial court. Although a contract, if not divisible, cannot be avoided only in part, that prohibition does not extend to reformation of only a part of a contract on the ground of either mistake or misrepresentation. Restatement § 383 comment a. So the lessee argues that the parties' mutual mistake entitled him to seek reformation of the lease to correspond with their true intention. New Mexico has recognized mutual mistake as a ground for reformation of a contract or other document in several cases. See, e.g., Chromo Mountain Ranch Partnership v. Gonzales, 101 N.M. 298, 681 P.2d 724 (1984) (land sale contract); Morris v. Merchant, 77 N.M. 411, 423 P.2d 606 (1967) (reservation of mineral rights in deed); Buck v. Mountain States Inv. Corp., 76 N.M. 261, 414 P.2d 491 (1966) (fire insurance policy); Cleveland v. Bateman, 21 N.M. 675, 158 P. 648 (1916) (deed). These cases represent applications of the rule in Section 155 of the Restatement: Where a writing that evidences or embodies an agreement in whole or in part fails to express the agreement because of a mistake of both parties as to the contents or effect of the writing, the court may at the request of a party reform the writing to express the agreement