The danger of signing a contract when you have not read it

During the on-going inquiry into his fitness to hold office, suspended National Police Commissioner Bheki Cele has confirmed that in the performance of his duties he frequently signed documents without reading them. However, according to Callum O’Connor, Associate in the Dispute Resolution practice at Cliffe Dekker Hofmeyr, the South African Police Services (SAPS) will not be able to avoid liability under the contracts by relying on the Commissioner's failure to read the contracts before signing them.

“There is a well-established legal principle that by signing a contract, a person signifies an intention to be bound by the contents of the contract. If it subsequently appears that a term in the contract is too onerous or that a bad bargain has been made that person cannot escape the operation of the contract by claiming not to have read the contract,” O’Connor notes.

O’Connor notes further that the position is not absolute as there are still defences available to such a person.

“These include:

• a misrepresentation as to the terms of the contract; or
• the contract was illegal; or
• the signatory was forced against their will to sign;
• there was undue influence;
• a justifiable mistake by a signatory; or
• the contract was set up as a fraudulent trap.”

He says that contracting parties should also be mindful of the provisions of the Consumer Protection Act. Although the Act has introduced new obligations on contracting parties, including the duty to use plain and simple language in contract and to point out and explain the onerous terms of contracts and clauses exempting liability, it has limited application as it applies to individual consumers and business with a low turnover.

“In the context of the suspended National Police Commissioner the Consumer Protection Act does not apply either as it does not apply to the State,” he adds.