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The recent Tennessee Court of Appeals’
decision of Advantage Windows,
Inc. v. Oscar Zacarias, No. E2014-00122-COA-R3-CV, 2014 WL 4403106 (Tenn. Ct.
App. 2014)
discussed the validity of a signed contract when the individual who signed the
contract does not understand English. In
the Zacarias case, an
agreement was signed between a homeowner and the plaintiff construction company
to perform certain work on the residence.
The homeowner never paid for the work.
Therefore, the construction company sued the homeowner for breach of
contract. The homeowner filed a counter-claim
asserting he only had a limited understanding of English and that the alleged
contract was actually explained to him as an “estimate”. The Trial Court found that because the preponderance
of “evidence established that Mr. Zacarias did
not know or understand the English language, [t]here was no meeting of the
minds and no way for Mr. Zacarias to form a
binding contract with Advantage Windows.” Advantage Windows
at 2.
This case was appealed to the Tennessee
Court of Appeals.
The Tennessee Court of Appeals found that
in order to have a binding contract, the “contract must result from a meeting
of the minds of the parties in mutual assent to the terms, must be based upon a
sufficient consideration, free from fraud or undue influence, not against
public policy and sufficiently definite to be enforced.” Advantage Windows
at 3. The Court then noted that T.C.A. §
47-50-112(a)
provides a statutory presumption that a signed written agreement contains the
intentions of the parties and that the individual who signed the agreement
agreed to be bound by those terms. T.C.A. §
47-50-112(a)
provides in pertinent part as follows:
(a) All contracts,
including, but not limited to, notes, security agreements, deeds of trust, and
installment sales contracts, in writing and signed by the party to be bound,
including endorsements thereon, shall be prima facie evidence that the contract
contains the true intention of the parties, and shall be enforced as written;
provided, that nothing herein shall limit the right of any party to contest the
agreement on the basis it was procured by fraud or limit the right of any party
to assert any other rights or defense provided by common law or statutory law
in regard to contracts.
Mr. Zacarias argued that Advantage Windows
failed to present evidence at trial that he understood what he was signing or
that there was a meeting of the minds. Advantage Windows
at 4. However, the Tennessee Court of Appeals found
that this argument ignored the statutory presumption and the general rule that
a “party’s signature on a contract, provided it was not acquired through fraud,
deceit or undue influence, is prima facie
evidence that the contract contains that party’s intention.” Advantage Windows
at 4.
Further, it is “well settled in Tennessee
that the fact that a person is unable to read creates no presumption that he
was ignorant of the contents of a contract signed by him.” Advantage Windows
at 4.
As a result, the Tennessee Court of
Appeals found this was an enforceable contract.
The Court stated:
Where a person
cannot read the language in which a contract is written, it is ordinarily as
much his duty to procure some person to read and explain it to him before he
signs it as it would be to read it before he signed it if he were able so to
do, and his failure to obtain a reading and an explanation of it is such gross
negligence as will estop him from avoiding it on the ground that he was
ignorant of its contents.
Advantage Windows
at 5.
(Citing DeFord v. National Life and Accident Insurance Company, 185 S.W.2d
617, 622 (Tenn. 1945)).
As a result, the Court found the contract
at issue to be a valid contract. The assertion
that Mr. Zacarias could not understand English is not sufficient to find that
the contract is invalid or that there was a lack of meeting of the minds. The bottom line is that the inability to read
a contract has no bearing on the contract’s enforceability.
Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation
blog.
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