Editor's note: Readers frequently ask this question, and the short answer is often: it depends. So, to leave you with a potentially more useful answer than "it depends," we've written this article to discuss the question in more detail. Hope it helps!
Here's the general rule.
It is a somewhat common misconception that a person cannot be bound to contract terms he did not read or know about. It's a misconception in the sense that some people believe this to be the general rule.
...because, in fact, the opposite is true: as a general rule, a person is bound to the terms of a contract he executes regardless of whether he first took the time to read and understand its terms.
Exceptions to the general rule
However, it's not a misconception in the sense that there are important exceptions to this rule, and this article will discuss one of those exceptions.
Let's start with a breakdown of the general rule.
Why do courts generally enforce contracts signed by someone who did not read its terms?
There are a number of reasons we might mention here to explain why courts do this. But I'll mention just a few.
One is the court's interest in making dispute resolution as predictable as possible. The idea is that, broadly speaking, it probably would not be a good thing if court verdicts were constantly catching people entirely by surprise. This is why "case precedent" serves an important role in our legal system. Prior court cases yield prior court decisions, and those prior court decisions can be cited as "authority" for why a court today should issue a similar decision in a similar case.
Since many civil disputes involve contracts between opposing parties, a large chunk of that case precedent set pertains to contract disputes:
- What constitutes a valid and enforceable contract?
- How do we determine the terms of the contract?
- Are all of the contract terms enforceable?
In addition to commonly raised questions that contract disputes ask the court to answer, there are commonly used procedures courts tend to follow to find those answers. For example, to determine what the terms of the contract are, case precedent might instruct courts to first look to the contract itself, to see what it actually says (a no-brainer, really). To describe this procedure, courts often use the phrase we look "inside the four corners" of the contract, which, of course, refers to looking at the written terms contained on the page (i.e. inside the four corners) of the written contract.
From a practical standpoint, you can also understand how this procedure would naturally lead to a more predictable dispute resolution process: by leaving less room for the "he said, she said" free-for-all that disputants might otherwise resort to.
The significance of your signature on a contract
In the course of this "inside the four corners"procedure, one of the key elements the court will look for on the contract itself is the signature of each party said to be bound by its terms.
In Moody Realty Co. v. Huestis, the Tennessee Court of Appeals said that:
One who signs a contract cannot later plead ignorance of its contents if there was an opportunity to read it before signing. The law will not allow a party to enter a contract and then seek to avoid performance because he did not read the agreement or know its contents. Otherwise, written contracts would be worthless. In general, the law holds parties responsible for what they sign.
Thus, when you sign a contract, the presumption becomes that you agreed to whatever the contents of that contract were at the time you signed it.
Can I get out of a contract I signed?
So, one implication of this general rule is that, when you're seeking to not be bound to a contract you signed but did not read, you would probably need to prevail on the argument that an exception to this general rule applies to your case.
So, one implication of this general rule is that, when you're seeking to not be bound to a contract you signed but did not read, you should treat your signature on that contract as a "problem" you need to solve first. To solve that problem, you would typically need to argue that an exception to this general rule applies to your case. So, the steps might be...
Step 1: determine which exeception best applies to your case.
Step 2: formulate an argument in support of that position.
Step 3: make the argument.
Citing to a contract dispute case decided in August 2020 by United States District Judge Clifton Corker, this article will give you a real-world example of these three steps in action...