Legal Consumer Tip #6 – Contract Terms Are Binding

Read all contract terms — you will be bound to them.

While this oft-stated advice seems simple enough, many legal consumers don’t read all contract terms before signing, and even fewer stop to think about how the terms will play out in different circumstances.  It is important to understand that when an unaccounted-for circumstance presents itself after the contract is signed, it’s almost always too late to alter the terms without mutual consent.

image-1The father of a law school student recently learned this lesson the hard way when the New Jersey appellate court ruled against him in an opinion dated February 20, 2014.  The father had entered into a divorce agreement with his ex-wife that provided each pay one half of their daughter’s “post-college higher education costs” defined as tuition, room and board, books and school fees, with certain conditions.  When the daughter, who was estranged from her father, enrolled in a top-tier law school, with no financial aid available, the father sought to nullify his obligation to pay under the contract.

Legal consumers should note the reasoning in the Court’s opinion as it dismantles the father’s arguments one-by-one, interpreting the language of the divorce agreement and comparing it to the father’s arguments.  For example, the father argued that the daughter’s enrolling in law school three years after college relieved him of his obligation to pay because the agreement afforded her only two years.  The Court disagreed, explaining that the “hiatus (1-2 years)” language in the agreement was “neither as rigid as father contends,” nor was it a condition to the father’s obligation.

The Court’s ruling on the father’s third argument illustrates the need to think long-term when entering into a contract.  The father contended that the agreement should be interpreted as implying that he would not be obligated to pay if he and his daughter were estranged.  The Court noted that they were estranged when the father signed the contract, and that if he wanted a relationship to be a condition of his obligation to pay, that term could and should have been included in the agreement.  The Court’s rulings on the father’s two other arguments are also instructive.

The bottom line: Legal consumers should ask themselves before signing on the dotted line how each term of a contract will operate in the future and whether there are any circumstances that would require different language or additional terms.  Contracts are binding, so read carefully and consider what could happen down the road.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970.

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