Signing Contract Without Understanding
Signing contract without understanding the terms and requirements can be a big mistake.3 min read
Signing contract without understanding the terms and requirements can be a big mistake. It is important to understand what a contract entitles and then the specific regulations set in the contract before signing it.
Basic Elements of a Valid Contract
A contract is legally binding so long as it meets the state's requirements for a valid contract. A valid contract has the following basic elements present:
- Offer: the specific terms of the contract agreement.
- Acceptance: the acceptance of both parties to the terms of the contract agreement.
- Consideration: the ability to bargain and that an actual exchange will take place.
Disputing a Contract
In some cases, if you signed a contract that was misrepresented, you may be able to void the contract agreement. If fraud occurred, the contract is voidable. Examples of fraud might include:
- Forged signature.
- Intentional misrepresentation that encouraged you to sign the contract.
A civil suit is often necessary to present evidence of the fraud and to void a contract agreement. You may be able to collect any damages associated with the fraud including financial losses. Intentional fraud may be subject to criminal charges and penalties. It is best to discuss your options with an attorney before choosing the best legal approach to take.
Some parties may also feel that they were tricked into signing a contract. It can be more difficult to prove that trickery occurred. Examples of trickery in a contract agreement include:
- Changing out the contract after the other party has reviewed it.
- Using transfer or carbon paper to collect the signature for a different document.
In order to prove that you were tricked into signing a contract, it would require parol evidence which is either written or verbal evidence that states something other than the written contract. Proving that you were tricked into signing a contract requires that you provide evidence for the following:
- You were misrepresented in some way.
- The representation was inaccurate.
- The other party intentionally misrepresented you.
- The misrepresentation was done in an attempt to get you to sign the contract agreement.
- You are subject to damages as a result of the misrepresentation.
Other things that can void a contract include mistakes, bad faith, and violence. Document all processes of the contract to ensure that you have sufficient evidence to prove an invalid contract agreement.
The Importance of Reading a Contract Before Signing
Contracts are a part of our everyday lives. You agree to the price of your breakfast before paying for it. You sign a contract when you buy a new car. It is crucial to thoroughly read over a contract before signing. Unless the contract stipulates otherwise, the contract cannot be changed.
Before signing a contract, realistically consider your ability to withhold your end of the agreement. If you have any financial concerns, it might not be a good idea to sign the contract right now.