THE GUNSTONS BLOG

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Wriggling room in contracts

 

There is a widely held perception that any agreement a person signs will be binding and enforceable against him, even if he didn’t know or understand what he was signing. The truth, however, is that there are certain, limited grounds a person could rely upon to excuse oneself from a contract which they had signed. These limited grounds include:

-Misrepresentation (where what you are signing, or its implications, is misrepresented, which induces you to sign);

-Duress (where you are coereced to sign);

-Undue influence (something less than duress, but nevertheless forces your signature);

-Where a key term or the entire contract is so vague that the law regards it as void;

– Where a key term or the contract is unconscionable (where the other party is acting in bad faith); and

-Where it is impossible to comply with the contract.

It must be emphasized that these grounds are limited, and in most cases, the signer of an agreement will be bound by his signature. Some laws also provide an out for a party to a contract in specific circumstances, for example where a sale of land does not contain the clauses required by the Alienation of Land Act. With the advent of the National Credit Act and Consumer Protection Act there may now be further instances where agreements (or parts thereof) can be set aside, despite being signed, due to inconsistencies with the relevant Act.

Despite the instances mentioned above, we continue to advise clients by the maxim caveat subscriptor (let the signer beware!). One should always be very careful to only sign what one understands and is agreeable to. It is always advisable that, where concluding an agreement, each side should instruct their own attorneys, who will be best placed to interpret the terms of an agreement and advise as to its implications. Agreements are usually the subject of negotiation, and appointing attorneys will leave you in the best position to negotiate an agreement that meets in your interests.

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