Allied Steel & Conveyors, Inc. v. Ford Motor Co.

277 F.2d 907 (6th Cir. 1960)

 

RULE:

In the absence of fraud or wilful deceit, one who signs a contract which he has had an opportunity to read and understand, is bound by its provisions. 

FACTS:

An automobile manufacturer brought an action against machinery and equipment manufacturer, seeking indemnification under a contract clause that purported to hold the machinery and equipment manufacturer responsible for an injury sustained by it's employee, even though caused by the automobile manufacturer's negligence. The district court found that a binding contract was formed at the time appellant began performance by delivery and installation of machinery upon appellee's premises. The case was appealed.

ISSUE:

Was the machinery and equipment manufacturer required to indemnify the automobile manufacturer based on a valid contract?

ANSWER:

Yes

CONCLUSION:

The court held that the machinery and equipment manufacturer was required to indemnify the automobile manufacturer despite injury resulting from the automobile manufacturer's negligence. The court applied the rule that, in the absence of fraud or wilful deceit, a party signing a contract after having an opportunity to read and understand it was bound by its provisions. Amendments to the parties' agreement, with all of their provisions and conditions, constituted a binding bilateral contract at the time appellant, with appellee's knowledge and consent, began performance by delivery and installation of the machinery upon appellee's premises.

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