Duty to Read a Contract

An adhesion contract is a standardized agreement, which occurs on a “take it or leave it” basis. If you do not agree to the terms of an adhesion contract, you cannot acquire the products or services as described in the contract. Adhesion contracts are different from standard contracts in that there is no opportunity to negotiate any of the terms of an adhesion contract.

Adhesion contracts are utilized in a wide variety of commercial settings. This is because of their efficiency, as most adhesion contracts are standardized forms. Some of the most common types of adhesion contracts include:

• Insurance Policies: Nearly all insurance policies are adhesion contracts. The insured has no bargaining power, and must either take the insurance policy as is or not take it at all;
• Housing Agreements: A lease is a common example of an adhesion contract because the terms are non-negotiable. The same principle applies for many other goods and services, such as buying a vehicle; and
• Tickets: When you purchase a ticket, there will most likely be a section of small print on the back of the tickets. This is considered to be an adhesion contract because once you purchase the ticket, you are bound by the terms of the small print contract. For example, tickets to most professional sporting events include a waiver of damages against the owners for any damages suffered as a result of your attendance. For instance, if you purchase a ticket to a baseball game, and get hit with a foul ball, you have likely already waived your right to sue the owner of the venue or others for your injuries.

The duty to read a contract is the assumption that both parties have read the agreement they consented to. The duty to read can present an issue if one of the parties signs an adhesion contract without having actually read and understanding the terms of the agreement.

However, the party responsible for writing the contract has the duty to call attention to the printed terms. What this means is that the author of the contract must make the terms noticeable, especially if a clause or provision is not something commonly appearing in contracts of the same type.

An example of this would be how an airline ticket will not generally require the ticket holder to pay a fee if they fail to show up for their flight. If the airline does expect the ticket holder to pay such a fee, they must make the fee reasonably clear to customers.

Is the Duty to Read Considered to be Absolute? What If the Author Hides the Contract Terms?

The duty to read is not considered to be absolute, as it can be raised, lowered, or even voided. This varies according to the specifics of each case.

Generally speaking, the duty to read is voided if:

• The contract is considered unconscionable;
• The contract violates a public policy; or
• The author of the contract has reason to believe that the other party would not agree to the terms, if they were made aware of those terms.

An example of this would be if one person writes a contract requiring another person to commit a specific crime. Regardless of whether the author believes that the signer would actually commit the crime, that contract term would not be enforced even if the contract is signed. Additionally, the duty to read would be void because committing a crime violates public policy.

The duty to read is lowered if the author of the contract attempts to deceive the other party, or if the terms are not reasonably clear. An example of this would be if someone owns an airline, and wishes to release themselves from liability for choking hazards while serving meals during the flights. If the airline owner puts their liability waiver on a web page that does not link back to the specific page which contains the waiver, the customers’ duty to read can exclude that liability waiver.

The author of the contract cannot hide a specific term of that contract. This is because, as mentioned above, the term would be automatically void because it is hidden. Additionally, to reiterate, the author of the contract has a parallel duty to call attention to the terms of a contract. This is considered to be especially important if the adhesion contract differs from adhesion contracts of similar agreements.

An example of this would be if a person uses standardized contracts for their social networking website. This contract does not differ from the contracts found on more popular websites, except that this contract requires that users who post certain material must pay the owner a set amount of money for each image or video. The website’s owner has the duty to highlight this penalty to people who use their website. The website’s owner can put the term in different colors, bold the term, place the term at the beginning of the contract, or do anything else which would draw the reader’s attention to the penalty.

What Factors Do Courts Take Into Consideration When Deciding if the Duty to Read Applies?

Adhesion contracts are judged based on all of the surrounding circumstances. One of these factors by themselves may not invalidate an adhesion contract, but when considered together, these factors could cause a judge to reconsider. Factors a judge might consider before enforcing an adhesion contract include, but are not limited to:

• Meeting of the minds, or, whether the customer knew or could have known about the contract’s terms;
• Language, or, whether the contract was understandable or deceitful. A contract portraying itself as an authorization form should not address release of liability unless it clearly labels that section;
• Presentation, or, whether the contract was in an obvious location or hidden from the other party. A small contract on the back of a ticket is considered to be normal and common, whereas a contract buried in the middle of a brochure would be considered suspicious; and
• Location, or, whether the contract was agreed to in a location which provided little time for the customer to read or consider the contract. An example of this would be how signing a contract from the comfort of home would generally be considered very different from signing a contract while people are waiting for the signing party to finish.

Some other factors that may be considered include the type of relationship between the parties involved in the contract, as well as the intentions of each party when creating and signing the contract.

Do I Need an Attorney for Issues Related to the Duty to Read a Contract?

If you are involved in any sort of contract dispute, especially if the dispute involves the duty to read, you should consult with an area contract attorney. Because state laws vary widely in terms of contracts and the duty to read, an experienced local contract attorney would be best suited to understanding how your state’s specific laws may influence your case.

An attorney can review the terms of your contract and help you determine what your legal options are. An attorney can also help you understand your legal rights and obligations. They can also help you determine whether the contract is enforceable, and inform you of any available legal defenses. Additionally, an attorney can also represent you in court, while helping you work towards an appropriate damages award.

If you would like to draft a contract, especially an adhesion contract, you should also consider consulting with a contract attorney. An experienced and local attorney familiar with your state’s laws can help ensure that you use the proper language and that your contract is legally enforceable. If you must file a lawsuit related to the duty to read a contract, an attorney can help you adhere to your state’s rules on bringing a breach of contract lawsuit, and collect all the required documentation to contest or enforce the contract.