I didn’t read the contract. Is it enforceable?

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I didn’t read the contract. Is it enforceable?

Jul 13, 2020

So, things got a little crazy at work for you. You had all of these projects coming across your desk and you were on a major time crunch and oh, by the way, you had a pounding headache that whole week too. You remember signing that one contract, but truth be told, you just didn’t have the time or energy to read it. You know that’s bad, but it was just one time and you figure it’ll probably work out alright. Anyway, if there’s a problem later, can’t you just come clean and say that you actually didn’t read it? Sure enough, just your luck. A dispute arises about the agreement you signed. You go back and read the contract and think to yourself, “Wow, if I’d realized this is what the agreement said, I definitely wouldn’t have signed it as is.” It’s not fair to enforce something you didn’t know about, so there’s no way it’s enforceable if you didn’t read it, right?

Unfortunately, while it seemed like a good idea at the time to skip reading the contract to save yourself the time and headache, you likely won’t have much success convincing a court not to enforce a contract against you because you didn’t actually read it. “[A] party is bound by provisions in an agreement which he signs, even though he has not read them and signs unaware of their existence.” N.A.M.E.S. v. Singer, 90 Cal.App.3d 653, 656 (1979); see also George v. Bekins Van & Storage Co., 33 Cal.2d 834, 848–49 (1949).

“Where a party to a written contract wishes to avoid liability . . . on the ground that he did not know its contents, the question, in the absence of misrepresentation, fraud, undue influence, and the like, turns on whether he was guilty of negligence in signing without such knowledge.” Knox v. Modern Garage & Repair Shop, 68 Cal.App. 583, 587 (1924). Further, when a party “is negligent in not informing himself of the contents, and signs or accepts the agreement with full opportunity of knowing the true facts, he cannot avoid liability on the ground that he was mistaken concerning such terms.” Id.; see also Greve v. Taft Realty Co., 101 Cal.App. 343, 351–53, (1929).

For clarity, parties who accept or sign a document that appears on its face to be a contract are deemed by law to agree to all of its terms. Therefore, the parties are bound by those terms even if they did not read the document and even if they are ignorant of some or all of its terms. See 1 Witkin, Summary of California Law, Contracts §§ 118-9. This makes sense from a commonsense standpoint, because courts do not want to reward people for being negligent in entering into contracts; contracting parties are held responsible for taking part fully in the contracting process. Thus, as long as a party entering into the contract has the capacity of reading and understanding it, the party will be bound by its contents and is not permitted to say that its explicit provisions are contrary to its intention or understanding. Palmquist v. Mercer, 43 Cal.2d 92, 98 (1954); Estate of Wilson, 64 Cal.App.3d 786, 802 (1976); Varco-Pruden, Inc. v. Hampshire Construction Co., 50 Cal.App.3d 654, 660 (1975); Larsen v. Johannes, 7 Cal.App.3d 491, 501 (1970).

There are some exceptions to this general rule, however. “Fraud or a confidential relationship giving rise to an affirmative duty of disclosure are obvious exceptions.” 1 Witkin, Summary of California Law, Contracts § 118. A party who signs an agreement without reading it can avoid being bound to its provisions when the party was induced to sign the agreement without reading it by a fraud or wrongful conduct by the other contracting party. Smith v. Occidental & Oriental S.S. Co., 99 Cal. 462, 471 (1893). Thus, if the other party somehow actively concealed the contents of the agreement or, due to some sort of preexisting confidential relationship, convinced you that you did not need to look at the contents of agreement, it is possible that a court would find the terms of the contract unenforceable against you.

Nevertheless, it is always, always, always best practice to read all contracts before you sign them. This way, there are no surprises later and you will not find yourself at the court’s mercy to get out of a sticky contractual situation.

Pfeiffer Law Corp is a law firm with an emphasis on entertainment and business law.

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