A Court will correct an error in a
contract, but only if it is obvious
A Court will correct missing
words or incorrect clause
numbers in a contract because
these are obvious errors. But
how far will a Court go? What
errors are obvious and what
errors are not?
The NSW Court of Appeal recently examined three errors in
a Contract for the Sale of Land. It decided that the
contract should be rectified for two of the errors because
the errors were obvious. It decided that the contract should
not be rectified for one error because it was not obvious.
In this article, we examine the Court of Appeal decision
of James Adam Pty Ltd v Fobeza Pty Ltd 
NSWCA 311 (Leeming JA, Bell P and Macfarlan JA agreeing)
(3 December 2020)
On 17 May 2019, Fobeza Pty Ltd agreed to purchase from
James Adam Pty Ltd certain parcels of agricultural land at
Woodstock, near Cowra in NSW for a price of $2,250,000. One
parcel was proposed Lot 102 in an unregistered plan of
The Contract contained these Additional Clauses which
dealt with the subdivision:
39.0 Subdivision of Lot 1 in Deposited Plan 841539
39.1 The Vendor discloses that it has agreed to transfer
2001 square metres of the subject lot, being Lot 1 in DP
841539, to the Cowra Council and Rural Fire Services for
use as its depot for the area.
39.2 Annexed herewith is … a sketch plan of the proposed
subdivision of the subject lot and in which is described
proposed Lots 101 and 102 … proposed Lot 101 is excluded
from the sale, and that proposed Lot 102 is included in
39.3 Completion of the contract is conditional upon the
registration of the plan of subdivision in accordance
with the sketch plan …
41.3 Purchaser’s right of rescission
a) The Purchaser may rescind this contract if the area
of lot 102 in the plan of subdivision as registered is
shown on the plan as being 2,100 sq. m or more, or if
the location or the width of the easement are
substantially different to that shown on the sketch plan
set out in clause 39.
b) A right of rescission under clause 41.3(a) may only
be exercised within 5 business days after notice is
given under clause 42.2(d).
The sketch plan of the proposed subdivision was:
The area of Lot 101 is clearly marked as 2001 m˛ on the
The Court of Appeal corrected two errors in clause 41.3:
first, it substituted Lot 101 for Lot 102; and second, it
changed the reference to clause 42.2(d) to clause 41.2(d)
because there was no clause 42.2(d).
This is what the Court of Appeal said about these errors:
“These are two uncontroversial instances of “obvious
errors” – where the literal meaning is an absurdity and
it is obvious what the intended wording must have been.
… these are good examples of where merely as a matter of
construction the written form of the contract may and
should be departed from.” (paragraph 14, judgment)
When the plan of subdivision was registered on 22 October
2019, the area of Lot 101 was shown as 2205 m˛ on the plan,
not 2001 m˛ as was marked on the sketch plan.
As this area was greater than 2,100 sq. m specified in
clause 41.3., the purchaser gave notice of rescission of
Contract and required a refund of the deposit paid of
The purchaser sought a declaration that it had validly
rescinded the Contract and sought the return of the deposit.
The vendor by cross-summons sought an order for specific
performance of the Contract (as rectified).
The vendor’s case rested upon whether or not it could
rectify the Contract to correct the surveyor’s error on the
sketch plan that the area marked for lot 101 was 2205m˛, not
(To clarify) – The dimensions of Lot 101 on the sketch
plan were the same as the dimensions of Lot 101 on the
registered plan – and the area was always 2205m˛. The error
was that on the sketch plan the area was marked as 2001 m˛,
when it should have been marked as 2205m˛.
Was the Court willing to
rectify the error in the land area?
The Court of Appeal accepted that the literal
construction of clause 41.3 was absurd. This was because
registration by James Adam of a plan of subdivision “in
accordance with the sketch plan” would always entitle Fobeza
to rescind the contract, as according to the precise lengths
and bearings of the parcel of land shown in the sketch plan,
the area of Lot 101 always exceeded 2100 m˛.
The Court of Appeal applied the common law doctrine of
contractual construction in which an objective view is taken
of the intention of the parties. It has two limbs.
The Court of Appeal said that the error was “sufficiently
absurd or inconsistent to engage the first limb of the
doctrine of rectification by construction”.
However, the Court of Appeal said that the second limb
was not satisfied because it was not possible to objectively
determine which of a number of possible constructions of
clause 41.3 the parties intended, because none were obvious:
“In order for the contract to be rectified as a
matter of construction, it is necessary for it to be
self-evident what the objective intention is taken to
This is not a case of a mere slip, where a word is
missing, a concept confused with its antonym, or a
clause misnumbered or incorrectly cross-referenced in
the contract. There is no clear or self-evident solution
to the absurdity that the figure of 2100m2 presents.
The parties’ written bargain was informed by the
erroneous area on the surveyor’s sketch plan, but where
neither appreciated that there was an error, it is
impossible as a matter of construction to impute to them
how their bargain would have been framed had the error
not been made.” (paragraphs 72 and 73, judgment)
Note: In this case, there were several possible
alternatives, such as the figure being 2315 sq. m being 5%
above the actual area of 2205, just as 2100 was 5% above the
stated figure of 2001; or 2100 sq. m instead of 2001 sq. m
on the basis that 2001 was a typographical error.
The Court of Appeal upheld the trial judge’s decision
that the Contract had been validly rescinded and the deposit
was to be returned.
An application for rectification of a contract will be
defeated if different alternatives are shown as
possibilities for the term in the contract that it a party
desires to rectify.
The existence of alternatives means that the error is not
obvious. As such, a Court will not correct the error.