My client "Sandra" 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.
Sounds pretty normal so far. But here's where it gets ugly.
Before Sandra 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 Sandra would have to pay it.
Well, the broker made one call to a daycare franchise, that turned out to be the business Sandra wanted to buy. The franchisor declied to deal with the broker or pay any commission. Despite his minimal effort of a single introductory phone call, the broker claimed the 10% commission, leaving Sandra on the hook for a substantial sum.
The lesson here: 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.