Gartner v. Eikill

319 N.W.2d 397

 

RULE:

In the absence of fraud or misrepresentation, a person who signs a contract may not avoid it on the ground that he did not read it or thought its terms to be different.

FACTS:

A plot of land was rezoned for commercial use under the condition that only one building could be constructed on the land. The owner then sold the land to a buyer who was interested in developing it. The parties signed a standard purchase and sale agreement, which contained a provision that the property was subjected to zoning restrictions. Further, zoning information about the plot of land is a matter of public record. The buyer admitted he did not read the agreement in its entirety, nor did he obtain the public record. When he learned that the zoning restrictions would prevent him from developing the land as he wished, he tried to back out of the sale and argued that the contract was void because of a mistake of fact.

ISSUE:

Can a person who signs a contract avoid it on the ground that he did not read it or thought its terms to be different, absent fraud or misrepresentation?

ANSWER:

No.

CONCLUSION:

The contract is not void based on a mistake of fact. There was no mistake of fact, but rather a mistake of value, which is a risk that contracting parties generally assume. Sometimes when one or both parties is mistaken about the nature of the underlying property that is being conveyed, they may not have to perform their obligations under the contract. Here, the buyer had constructive knowledge of the zoning restrictions, and he is therefore not excused of his obligations simply because he failed to read the agreement carefully.

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