What does the term "reformation" refer to in contract law?

In contract law, the term "reformation" specifically refers to a remedy that enables a court to amend or rewrite a contract to reflect the true intentions of the parties involved. This often occurs when the original contract contains errors, ambiguities, or does not accurately capture what both parties had intended due to misunderstandings or miscommunications.

Reformation is particularly useful in situations where the existing document does not match the agreement that was reached, whether due to drafting mistakes or other factors. By reforming the contract, the court aims to ensure that the contractual obligations and rights are aligned with what both parties originally meant, thereby providing a fair and just solution that upholds the essence of their agreement.

In contrast, other options such as dissolving a contract, enforcing an illegal contract, or situations involving a defaulting party address different legal mechanisms and concepts that do not pertain to the alteration of a contract's terms to reflect true intent.