“I did not read the Contract Properly” – Caveat Subscriptor

by | Nov 3, 2022 | Civil Litigation and Alternative Dispute Resolution, Commercial law, Contract Drafting, Publications | 0 comments

“I did not read the contract properly.” – barely a week passes before we hear these words from clients again.

The Caveat Subscriptor principal is a Latin term loosely translated: “let the signer beware.”

In Burger v Central South African Railways[1], the Supreme court of Transvaal held that “…it is a sound principle of law that a man when he signs a contract, is taken to be bound by the ordinary meaning and effect of the words which appear over his signature”.

It is generally accepted that a signature indicates a contractor’s intentions to be bound by the contractual terms in the signed agreement.

However, in many instances, you will find that clients were under duress, they have been misguided about the contents of the contract, or there have been other aspects of misrepresentation.

Under these circumstances, the following primary defences may assist:  

Iustus Error Doctrine

The Iustus Error Doctrine is a corrective measure when dealing with the dissensus of a contract. Simply put, a party will not be held bound to an agreement if that party mistakenly gave their consent. However, the mistake must be material and reasonable.

One also needs to ascertain if the signatory understood all the contractual terms and whether the signatory was only required to understand the contract reasonably. If, for instance, the signatory was a businessman and was signing a company contract, he should know all the technical words relating to the business contract.

In a standard term agreement, it would be challenging to prove mistake, but if it is intricate, it may, more easily, be raised.

It should also be noted that if a mistake is material, then the contract is void for mistake unless a reasonable reliance is present. If a mistake is non-material, then it may be voidable.

Signing Without Consent

The second defence I raise is signing without proper consent. For example, if a person signed an agreement and did not have contractual capacity ie. the signatory was under age or the signatory was under duress or signed due to undue influence. You would need to prove such for the contract to be void.

Conclusion

There are many factors to consider to find a valid defence against Caveat Subscriptor. Let’s start with understanding the reason the person signed the agreement. You may find that a person will be bound to their contract unless it is proven that the contract was brought about due to duress, fraud, misrepresentation, undue influence or mistake, or if the entire agreement is contrary to our laws.

Contact an attorney at SchoemanLaw Inc for your contract law needs!

[1] Burger v Central South African Railways[1] 1903 TS 571.

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