WHEN IS A CONTRACT NOT A CONTRACT?

If the writing is so small on a contract that it cannot realistically be read, does the document hold?

“I recently bought a second-hand car from a local car dealership. Not long afterwards the car started giving me trouble. When I took it back to the dealership, they said it was not their responsibility as the contract I had signed transferred all responsibility to me. They showed me the contract, but most of it was printed so small that I couldn’t even read it, let alone understand it. Surely I should at least be able to read a contract to be bound by it?” We have all seen the fine print in standard form agreements, sometimes with print so small and filled with legalese that even to the trained eye, these provisions look like another language altogether. In general in our law there is a growing trend away from such fine print and legal “gobbledygook” towards understandable language.

The general rule in our law in relation to contracts is that if you signed it, you are bound to it. However, our courts are slowly starting to create exceptions to this hard and fast rule. In a recent case which also related to fine print, the high court held that if the terms of the agreement could not be read, the agreement could be unenforceable, both in terms of our common law as well as falling foul of the Consumer Protection Act 68 of 2008 (“CPA”) which requires clear and understandable language in consumer contracts.

In determining the enforceability of the agreement under the common law, the court considered the duty to act in good faith as well as the notion of public policy.

Good faith reflects the community’s conception of equity, justice and reasonableness. In this regard, the court determined that unreadable legal writing amounts to failure to establish an agreement. Public policy also demands that the enforceability of an agreement must be measured against the values enshrined in our constitution. The court held that in the specific circumstances, public policy would tip the scales of justice in favour of the consumer, as it would be difficult to prove consensus on an agreement which is not legible to the class of persons who are supposed to understand it.

The court accordingly found the agreement to be against public policy and therefore invalid.

What this boils down to is that if the fine print in an agreement is so small that it cannot be read, the enforceability of the agreement can be challenged.

It must be understood, though, that small print does not automatically make the agreement invalid. The enforceability of a contract will thus have to be established on a case-by-case basis.

It is recommended that you consult your attorney regarding the enforceability of the car dealership agreement, taking into account the fine print as well as the provisions of the CPA.