Is a person bound by a contract signed without reading it?

The legal position

The signature rule. The law takes a strict and objective approach. A signature on a contractual document binds the signatory to its terms, whether or not they were read. The rule may operate harshly, but it is the basis on which parties are entitled to rely on signed documents.

The rule is subject to four recognised limitations:

• Misrepresentation of the effect of the document. Where the other party misrepresents the nature or extent of a term, for example by representing that a clause is narrower than it is, that party may rely on the term only to the extent that it was accurately described. This applies even where the misrepresentation was innocent.
• Non est factum ("it is not my deed"). This is a very narrow defence. It is available to a person who signed a document fundamentally different in character from that which the person believed it to be, and who was not careless in signing it. It is most often available to persons who, through blindness, illiteracy, lack of understanding of the language or other incapacity, had to rely on another's description of the document. It does not assist a person who simply chose not to read the document.
• Documents that are not contractual. A receipt, delivery note or record of attendance is not a document in which contractual terms would ordinarily be expected. Signing such a document does not necessarily incorporate conditions printed upon it.
• Statutory control. Certain terms are ineffective notwithstanding a signature. Under the Unfair Contract Terms Act, for example, liability for death or personal injury resulting from negligence cannot be excluded or restricted by any contract term (s 5(1)).

Independently of those limitations, the contract as a whole may be set aside where the signature was induced by a false statement of fact, by duress, or by undue influence.

Where terms are not signed, as with terms printed on a ticket or displayed on a notice or website, a different test applies. The question is whether reasonable steps were taken to bring the terms to the other party's notice before or at the time the contract was made.

Practical implications

A signatory is bound by a cancellation charge contained in a signed agreement, even if the clause was not read. The rule against penalties does not assist in respect of a charge that is simply the agreed price of exercising a right of cancellation conferred by the contract. That rule applies only to sums payable upon a breach of contract.

Statements made before signature remain relevant. Where the effect of a term was misrepresented, for example by an assurance that the contract could be terminated at any time without charge, the party that made the statement may be unable to rely on the term that it misdescribed.

That a person is bound by a signed document does not mean that every clause in it is enforceable. Exemption clauses are subject to separate scrutiny, as are penalty clauses. See Do "no refunds" and "at owner's risk" notices protect a business?

Recommended steps

Before signing, a person should request a copy of the document and sufficient time to read it, and should retain a copy of every page. Specific enquiry should be made about cancellation, renewal, charges and limitations of liability. Any assurance given should be incorporated into the document itself.

Where the document was explained by a representative of the other party, a written record should be made of what was said, when, and by whom.

Where the effect of a document was misrepresented, the objection should be raised in writing and without delay, since delay may be treated as acceptance of the terms.

A business should not rely on the signature alone to support onerous terms. Drawing such terms specifically to the other party's attention strengthens the business's position. An inaccurate explanation given by its representatives may deprive the business of the protection the signature would otherwise afford.