In a dynamic business world, the conventional businessman’s handshake is no longer enforceable. But his signature is definitely indispensable. Try to figure this out a little. Have you signed a letter placed before you by your secretary, acquaintance, or representative and as custom you rely upon his honesty or judgment, you sign without reading it? Please do not think that you will be able to avoid the legal implications afterwards in regard to third parties. You will be bound by it.
Perhaps the fate of Mrs Gallie-the plaintiff in the English contract law case Gallie v. Lee should suffice. Mrs Gallie was an octogenarian in her 80s and had a trusted nephew by the name Walter Parkin who had helped her over the years. Mrs. Gallie was a widow and she had no children of her own. It’s no wonder in Mrs. Gallie’s will, Walter was the sole beneficiary. Gallie gifted her house-no 12 Dunkeld Road, Goodmayes, Essex to Walter in the following words; ‘Everything I possessed belongs to him’. Walter had a different idea. He wanted to raise money on the house and she allowed him to undertake the transaction with a condition that she could stay in the house during her lifetime.
On the side, Walter had a friend called Lee who was in dire need of money to settle his debts. Relying on a solicitor’s clerk, Lee acquired documents drawn in the context that Mrs. Gallie would sell the house to him for £3,000 through a mortgage arrangement. ‘What is it for?’ she asked. ‘It is a deed of gift for Wally for the house’, Lee replied. Apparently, she was seventy eight years old by then and her glasses were either mislaid or broken and she failed to read the document. Unfortunately, Mrs Gallie signed the document happily in June 1962. The solicitors got Lee a £2,000 loan from the Anglia Building Society and he acquired money on a second mortgage but defaulted on installments. The Building Society sued for possession.
At the trial, Mrs. Gallie and Walter pleaded non est factum-that the document was not hers. Judgment was accordingly entered for her. The Building Society appealed to the Court of Appeal where the appeal was upheld. Lord Denning held, ‘A man who has failed to read a document and signs it should not be allowed to repudiate it as against an innocent purchaser’. ‘His remedy is against the person who deceived him’. Even if he could plead fraud or mistake as against the immediate party, he would not be able to avoid it ‘when it had come into the hands of one who had in all innocence advanced money on the faith of it being his document, or had otherwise relied on it…’
Mere mistakes in the contents of a document you sign will never allow you to avoid its effect.
In principle, the court firmly established that; ‘whenever a man of full age and understanding who can read and write signs a legal document put before him for signature which on its face is intended to have legal consequences, then, if he does not take the trouble to read it but signs it as it is, relying on the word of another as to its character or effect or contents, he cannot be heard to say it is not his document.’ Indeed mere mistakes in the contents of a document you sign will never allow you to avoid its effect. If you are aware of its essential nature, then it is yours, even if the contents are not as you think.
Lord Justice Rusell agreed with Lord Denning and said, Mrs. Gallie had intended to sign a document divesting herself of her interest in the house. This is what he did. Lord Justice Salmon agreed and reasoned, a court, ‘thus achieves a result which accords with reason and justice’.
An appeal was presented to the House of Lords where the case was known as Saunders v. Anglia Building Society. The Court of Appeal decision was affirmed accordingly.
However, an exception to the underlying principle is, if the document you are signing is entirely different in character and nature from that which you believed you were signing, you may be able to establish that it has no effect. Be mindful the next time you are signing a contract. Won’t you?
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