|July 22, 2014|
Previously published on June 25, 2014
Sounds pretty simple, right? Pretty basic. Yet it’s amazing how often this simple rule bites people when they disregard it. Even lawyers can be guilty.
Sure, most folks will take the time to read a contract for an important business transaction like buying or selling real estate or a business, or entering into a partnership (or, better still, will take it to their attorney to read and explain to them). But how about a non-disclosure or non-compete agreement mixed in with the stack of documents signed in connection with a new job? Or the statement from the guy who just serviced your A/C unit? Or that software license that we all just click past? Or the credit card charge slip at the restaurant?
Under Texas law everyone is presumed to have read and understood any agreement they sign. More important, absent some extraordinary circumstance, you’re stuck with whatever you sign no matter whether you read it or not. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 134 (Tex. 2004) (orig. proceeding) (a person is presumed to have read an instrument before signing it, and is charged with knowledge of its contents, absent a showing of fraud).
A few weeks ago I stopped at a local BBQ restaurant to pick up a half pound of ribs and a couple of slices of brisket. I watched the girl ring it up on the machine, and it showed $14 and change. I handed her my credit card, she ran it, handed me the charge slip to sign, and I signed it, grabbed my BBQ and went on my merry way. Imagine my shock weeks later when I received my credit card statement and saw that I had been charged $74 and change. Trying to think back to that occasion, I remembered I had been annoyed with the guy in line in front of me, because he was taking forever getting all sorts of different items to take back with him to East Texas. I also remembered that his bill was in the $70 range.
The next day I called my credit card company to dispute the charge. A few days later they sent a letter advising that they contacted the restaurant, and enclosed a copy of the $74 charge slip with my signature plainly on it. I don’t know whether it was mistake, or an intentional rip off, but I was stuck. I was in such a hurry to get out get home and eat that I did not pay close attention to the charge slip I signed. As a result, I had some very expensive BBQ.
The moral of the story: always, always read it before you sign it. It doesn’t matter whether it’s a 50-page contract or a simple credit card charge slip. If you don’t, you may be stuck with some painful unexpected consequences. Worse still, even the best of lawyers may not be able to get you out of whatever you got yourself into.