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Chapter 4 1. Interpretation
REFORMATION OF INSTRUMENTS
Art. 1359. When, there having been a
meeting of the minds of the parties to a
contract, their true intention is not
expressed in the instrument purporting
to embody the agreement, by reason of
mistake, fraud, inequitable conduct or
accident, one of the parties may ask for
the reformation of the instrument to the
end that such true intention may be
expressed.
If mistake, fraud, inequitable
conduct or accident has prevented a
meeting of the minds of the parties, the
proper remedy is not reformation of the
instrument but annulment of the
contract.
Art. 1360. The principles of general law
on the reformation of instruments are
hereby adopted insofar as they are not
in conflict with the provisions of this
Code.
Reformation of Instruments
 Reformation is defined as a remedy
in equity, whereby a written
instrument is made or construed so
as to express or conform to the real
intention of the parties, where some
error or mistake has been
committed.
 The rationale of the doctrine of
reformation is that it would be unjust
and inequitable to allow the
enforcement of a written instrument
which does not reflect or disclose
the real meeting of the minds of the
parties.
 In granting reformation, the remedy
in equity is not making a new
contract for the parties, but
establishing and perpetuating the
real contract between the parties
which, under the technical rules of
law, could not be enforced but for
such reformation.
 Equity orders the reformation of an
instrument in order that the true
intention of the contracting parties
may be expressed.
Distinguished from Interpretation
Contracts
YRSC – Obligations and Contracts Reviewer, 2019-2020
 act of making intelligible what
was before not understood,
ambiguous, or not obvious.
 It is a method by which the
meaning of the language is
ascertained.
 The interpretation of a
contracts is the determination
of meaning attached to the
words written or spoken
which make the contract.
2. Reformation
 is that remedy in equity by
means of which a written
instrument is made or
construed so as to express
or conform to the real
intention of the parties.
 In granting reformation,
therefore, equity is not really
making a new contract for
the parties, but is conforming
and perpetuating the real
contract between the parties
which, under the technical
rules of law, could not be
enforced but for such
reformation.
Requisites of Reformation
 In order that an action for
reformation of instrument may
prosper, the following requisites
must be satisfied:
1. There must have been a
meeting of the minds if the
parties to the contract;
2. The instrument does not
express the true intention of
the parties; and
3. The failure of the instrument
to express the true intention
of the parties is due to
mistake, fraud, inequitable
conduct or accident.
 In actions for reformation of contract,
the onus probandi is upon the party
who insists that the contract should
be reformed.
Effect of Mutual Mistake of Parties
 When mutual mistake of the parties
cause the failure of the instrument to
disclose their real agreement, said
instrument may be reformed.
of
 However, when the mutual error of
the parties relates to the legal effect

of their agreement which frustrates
the real purpose of the contract, the
consent is vitiated and the remedy is
not reformation of the instrument but
the annulment of contract.
 But in order for reformation of the
instrument by reason of mutual
mistake to be applicable, it is
necessary that:
1. The mistake should be of
fact;
2. The same should be proved
by clear and convincing
evidence; and
3. The mistake should be
common to both parties to
the instrument.
Art. 1361. When a mutual mistake of the
parties causes the failure of the
instrument to disclose their real
agreement, said instrument may be
reformed.
Art. 1362. If one party was mistaken and
the other acted fraudulently or
inequitably in such a way that the
instrument does not show their true
intention, the former may ask for the
reformation of the instrument.
Art. 1363. When one party was mistaken
and the other knew or believed that that
the instrument did not state their real
agreement, but concealed the fact from
the former, the instrument may be
reformed.
Art. 1364. When one through the
ignorance, lack of skill, negligence or
bad faith on the part of the person
drafting the instrument or of the clerk or
typist, the instrument does not express
the true intention of the parties, the
courts may order that instrument be
reformed.
Art. 1365. If two parties agree upon the
mortgage or pledge of real or personal
property, but the instrument states that
the property is sold absolutely or with a
right of repurchase, reformation of the
instrument is proper.
Instances Where Instruments May Be
Reformed
1. When a mutual mistake of the
parties causes the failure of the
instrument to disclose their real
agreement.
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2. If one party was mistaken and the
other acted fraudulently or
inequitably in such a way that the
instrument does not show their true
intention, the former may ask for the
reformation of the instrument.
3. When one party was mistaken and
the other knew or believed that the
instrument did not state their real
agreement, but concealed the fact
from the former, the instrument may
be reformed.
4. When one through the ignorance,
lack of skill, negligence or bad faith
on the part of the person drafting the
instrument or of the clerk or typist,
the instrument does not express the
true intention of the parties, the
courts may order that instrument be
reformed.
5. If two parties agree upon the
mortgage or pledge of real or
personal property, but the instrument
states that the property is sold
absolutely or with a right of
repurchase, reformation of the
instrument is proper.
Art. 1366. There shall be no reformation
in the following cases:
1. Simple donations inter vivos
wherein no condition is imposed;
2. Wills; and
3. When real agreements is void.
Art. 1367. When one of the parties has
brought an action to enforce the
instrument, he cannot subsequently ask
for its reformation.
Instances Where Instrument May Not Be
Reformed
1. If mistake, fraud, inequitable conduct
or accident has prevented a meeting
of the minds of the parties, the
proper remedy is not reformation of
the instrument but annulment of the
contract;
2. In simple donations inter vivos
wherein no condition is imposed;
3. In wills;
4. When real agreements is void;
5. When one of the parties has brought
an action to enforce the instrument,
he cannot subsequently ask for its
reformation; and
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6. When the contract is unenforceable

because of failure to comply with the
Statute of Frauds.

Art. 1368. Reformation may be ordered

at the instance of either party or his
successors in interest, if the mistake
was mutual; otherwise, upon petition of
the injured party, or his heirs and
assigns.
Art. 1369. The procedure of the
reformation of instruments shall be
governed by rules of court to be
promulgated by the Supreme Court.

Who May Demand Reformation

 If the mistake was mutual – either
party or his successor-in-interest
may demand for reformation.
 If the mistake was not mutual –
only the injured party or his heirs
and assigns may demand for
reformation.
 However, the party who has brought
an action to enforce their
instruments cannot subsequently
ask for its reformation.

YRSC – Obligations and Contracts Reviewer, 2019-2020