• Tanya S Osensky

Contract Mistake: Not Reading the Contract Before Signing

Definitely avoid this contract mistake. Never sign a contract that you have not read or don’t understand.

Sometimes contracts are confusing. Sometimes they’re vague. And sometimes what someone tells you is in the contract is not what’s actually in it.

My client was looking to buy a daycare center. She signed an agreement with a business broker. This Agreement said that the broker would help find a business and then be entitled to a 10% commission. Before she signed, the broker assured her that his services would be at no cost to her, because the seller would pay his commission.

But the contract said otherwise. It said that if the seller refused to pay the commission, then the buyer would have to pay it.

Well, the broker made one call to a daycare franchise, that turned out to be the business that she wanted to buy. But the franchisor refused to deal with the broker or pay any commission. So, the broker did nothing else to help her with the purchase. Still, he claimed the 10% commission, and based on the $2 million dollar purchase price, it would be a very hefty commission that she would now have to pay for that one phone call that he made.

Whatever they tell you before you sign doesn’t matter. It’s what’s in the contract that matters.

And, once you sign a contract, you can’t un-sign it.

It doesn’t matter if you didn’t read it, didn’t understand it or didn’t realize what you were signing. As long as you’re an adult with full legal capacity when you sign a contract, it’s done. So, before signing a contract, it’s important to read it, understand it, ask questions, and get competent legal advice.

Just Don't Do It.

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