Music Trade Review

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THE
MUSIC TRADE
REVIEW
Signing A Business Document Without Reading It.
This is a Topic of Exceeding Interest to Members of the Music Trade Industry as Well as Business Men
Generally—The Liability of a Man Signing a Business Document Without Reading It is Set Forth
Very Comprehensively and the Legal Responsibilities Involved Explained—It Has Been Held That
a Contract Cannot Be Void Merely Because the Party Signing It Was Ignorant of Its Contents, If
No Fraud Was Practiced to Prevent Him from Reading It or Having It Read ; in Such a Case His
Ignorance Was Due to His Own Negligence—The Rule Regarding Negotiable Paper.
CLIENT who is quite an important business man came to me
in great perturbation last week over a muss he found him-
self in—the other party to a contract which my client had signed
without reading was endeavoring to hold him to it. After he had
signed it my client had discovered something in it which he did
not know was there, and which had he known of it would have
prevented him from signing. I was compelled to give him very
discouraging advice in the matter and the whole incident has in-
spired some discussion on the liability of a man who signs a con-
tract, an order, or any form of agreement, without reading it.
The law on the subject is summed up in a recent case in
which the point was squarely decided. The following is verbatim
from the court's opinion: "A contract cannot be avoided merely
because the party signing it was ignorant of its contents, if no
fraud was practiced to prevent him from reading it or having it
read. In such a ease his ignorance was due obviously to his own
negligence."
Almost the only exception to this rule is in the case of a person
who cannot read or write, and who, as the other party knows, be-
lieves the contents of the document to be different than it is.
The reader will note the language of the court in the above
decision, to the effect that ignorance of the contents of a contract
will not avoid it "if no fraud was practiced to prevent him from
reading it or having it read." As to this feature of the law the
courts differ. Every business man knows that it is a common de-
vice of the fraud scheme solicitor to prevent the man he is solicit-
ing from reading the contract, or the order, carefully, by some
misrepresentation as to its contents. "You needn't bother to read
that; it's only a receipt for the goods," or only "a lot of stuff that
doesn't mean anything," are familiar examples. Some States say
that where a man is prevented from reading a contract by mis-
representation as to its contents, he can declare the contract void
and refuse to perform it. This on the theory that the person
deceived might well have been persuaded into signing by reliance
upon the other party's false representations. This rule is not uni-
versal in all the States, but it is the weight of authority and is in
force in the following: Alabama, Arkansas, Georgia, Illinois,
Kansas, Massachusetts, Michigan, Minnesota, Missouri, Nebraska,
New York, Ohio, Pennsylvania, Texas and Wisconsin.
In California, Iowa, Indiana and in a few cases brought in the
United States Courts, the rule is otherwise. These cases hold that
even where one party to a contract makes absolutely false repre-
sentations as to its contents, and by those representations induces
the other party to sign without reading, the agreement can be en-
forced against the latter, if he could have read it and did not. Of
course, in the few States named there is, therefore, no exception
to the ironclad rule that the only safe course is to read everything
before signing. And as a matter of fact, this is the only safe rule
anyway, even with the protection of other States' decisions.
Obviously it goes almost without saying that where one party
to a contract reads it to the other, and distorts its language or omits
or adds anything, the other party is not bound. And this rule is
applied in most States even where the party deceived could have
read the paper under other circumstances. For example, I remem-
ber a case in which one party to a contract about to be executed
met the other as the latter was about to take a train. He was hur-
A
ried and could spare no time to read the paper then, but upon the
other party's representations as to what the document contained
he signed it. It turned out that the representations were false and
the party deceived by them threw the thing over. In the lawsuit
that followed the court decided that the party deceived by the false
representations was not bound.
In order to relieve a person deceived into signing a contract
by false representations, however, the representations must be as
to the actual contents of the paper. False representation as to the
legal effect of the paper is not a good defense.
The courts also refuse to let a party to a contract off unless
the false representations of which he complains have misled him
to his injury. Usually he must show that signing the contract has
damaged him, although there are some cases in which a man was
let out of a contract who could do no more than swear that he
would not have signed it had it not been for the false representa-
tions as to the contents.
The rule as to signing checks, promissory notes and other
negotiable paper under false representations as to the contents is
different. The person who does this is given much less protection
if he signs without reading than if he had signed an ordinary con-
tract. The weight of opinion is this: That for the person who
signs a note, for example, under a misapprehension as to its con-
tents, or where he signs it not believing it to be negotiable paper at
all, he is not liable if his mistake was due to the fraud, deceit or
misrepresentation of another, and this is so even where the note
has passed into the hands of a third party for value.
But there is a most important qualification to this rule, and it
is the qualification that spoils most defenses. It is this—that the
partv who signed must not himself have been guilty of negli-
gence.
Now, what is negligence in such a case? What amounts to
negligence depends on the facts of each case, but many cases have
held that a failure to read the paper or have it read before signing
is negligence. There is a case in Kansas where a man signed a
note which was represented to him to be a copy of an agency con-
tract. In fact, the other party, a total stranger, read it to him
as an agency contract, and he signed it under that delusion. When
it turned up as a promissory note in the hands of a third person for
value received and without notice, the maker refused to pay on
the ground of fraud. The court, however, held that his defense
was bad; he must pay because he had been negligent in not in-
specting the paper before he signed it.
The courts of Connecticut, West Virginia, California, Iowa
and Pennsylvania do not subscribe to the doctrine which I give
above as the weight of opinion. They hold that the maker of a
promissory note is liable for it after it gets to a third party, for
value and without notice, even though he were deceived into sign-
ing it by the grossest false representations. This on the^ same
ground—that nothing will excuse a man who can read from first
examining the documents he signs.
And I repeat what I said in the beginning—and this is the
whole moral here—that the man who puts his name to anything
without very careful study of the contents is liable to find himself
in a much less comfortable bed than he expected,-—Copyright by
Elton J. Buckley,
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