Signing a contract is a crucial step in which the parties to the contract express their agreement to the content and terms of the contract. A person who signed a contract will find it very difficult in the future to claim that he did not understand it or did not agree to its terms, especially if the contract is written in a language that the signer understands.
It is precisely for this reason that it is important to fully understand what you are signing and what you are committing to, with the aim of avoiding claims regarding breach of contract and managing a financial or civil claim (and in exceptional cases even a class action ) in court.
Before signing a contract – read it WELL
Imagine the following situation: a person buys a new car, and as part of the purchase process is required to sign a contract specifying and confirming the ordered model, vehicle specifications, payment terms, vehicle delivery date, etc. Before signing the contract, the buyer did not bother to read the contract in its entirety. The time has come to receive the vehicle and the buyer discovers that he received a vehicle with different specifications than he thought he was actually purchasing, even though according to the contract the company provided the buyer with the correct specifications.
This situation where a party to a contract is "surprised" at a late stage before the signing of a contract between the parties, is a very common situation and mainly stems from the "it will be fine" mentality that is very prevalent in our country. In practice, this approach leads to many legal procedures, some of which could have been unnecessary in the first place if, before signing a contract, the parties had invested time and read it.
It is very important to read every contract from beginning to end, before signing it (preferably more than once). If the contract has appendices it is very important to read them as well. Do not give up on reading the contract even if it is a very complex contract. You may not understand everything (which I will address later), but you will most likely understand a significant part of the contract, or most of it.
Don't give up on reading the appendices either. Sometimes the appendices to the contract include essential details that you must acknowledge and confirm. Signing a contract without reading the appendices may lead to exactly the same situation as if you had not read the contract at all.
What do you do if you don't understand all the clauses of the contract?
Merely reading the contract before signing it is not enough. It is very important to make sure you understand exactly what you are signing . If you come across a section you do not understand (whether it is written in a language you do not understand, whether it includes technical/professional terms you do not know, or whether it is written in not understandable language) it is very important to contact a professional, such as a contract lawyer or another professional to explain the meaning to you (if the section includes, for example, some term from the field of medicine, you should consult a doctor from that field so that he can explain what the term means).
You must not sign any contract if you do not understand its contents, even if you have read it several times from beginning to end. As I explained before, if you signed a contract, in court you will be seen as someone who understood and agreed to all the terms of the contract.
The desired course of action if you do not understand all the clauses of the agreement
The desired procedure in this case is to mark all the clauses/terms you do not understand with a marker, so that the clauses will stand out and it will be clear to you what you need to check before signing a contract. In the next step, you need to consult with the relevant professional (usually this will be a lawyer). After you understand the meaning of the unclear section or sections, you will have to make a decision whether you agree with the content of the sections or not.
If you do not agree with the content of the sections, you should demand that the wording be changed. If the opposite party does not agree to change the wording, it is recommended to forgo signing the contract. Signing a contract under these circumstances will leave you in a disadvantageous position because you will be signing something that is apparently not acceptable to you or does not benefit you (or, at the very least, is incomprehensible to you).
It is not possible to cancel the contract due to cheaper price elsewhere (except for exceptions)
Before signing a contract, you must check and make sure that the contract is worthwhile for you. That is, that the terms of the contract favor you. For example: if you decided to purchase an apartment for 2 million shekels from a contractor and after the purchase you discovered that the value of the apartment is no more than 1.5 million shekels, you will not be able to demand the cancellation of a deal with a contractor because your mistake is in the viability of the deal.
In this regard, Article 14 of the Contracts Law states as follows:
(a) A person who entered into a contract due to a mistake and it can be assumed that without the mistake he would not have entered into a contract and the other party knew or should have known about it, may cancel the contract.
(b) Whoever entered into a contract due to a mistake and it can be assumed that if it were not for the mistake he would not have entered into the contract and the other party did not know and should not have known about it, the court may, at the request of the erring party, cancel the contract, if it deems it just to do so;If he does so, the court may oblige the erring party to pay compensation for the damage caused to the other party due to the conclusion of the contract
(c) A mistake is not grounds for canceling the contract according to this section, if the contract can be fulfilled by correcting the mistake and the other party announced, before canceling the contract, that he is willing to do so.
(d) "Mistake", for the purpose of this section and section 15 – whether in fact or in law, excluding a mistake that is nothing but the viability of the transaction.
That is, after signing a contract, it is possible to demand the cancellation of the contract due to a mistake that led to the contracting of the parties to the contract, but not in the case of a mistake regarding the viability of the transaction. In these cases, usually, your request to cancel a transaction will be rejected in court.
For this reason, you must carefully check that the service or product you are purchasing is indeed worth the payment you intend to pay. If we return to the example of purchasing the apartment, you can use an appraiser's opinion to estimate the value of the apartment before signing a contract and before you actually purchase it.
If you are buying a used car, you can check the value of the car according to the Levy Yitzhak price list.
The costs you are expected to pay for breach of contract
If after signing a contract it turns out that you did not act in accordance with its instructions, and in fact you violated the contract, you may end up in court. Just going to court as a defendant will cost you a lot of money and time. The higher the amount of the lawsuit against you will be, the higher the attorney's fees you will have to pay in order to obtain legal representation are likely to be higher.
Furthermore, if the court determines that you violated the agreement, you are expected to pay the plaintiff compensation for the damages you caused, damages for breach of contract, damages for mental anguish , and in addition to everything, court costs and attorney's fees to cover the plaintiff's expenses.
All these expenses can, in most cases, be prevented by reading and understanding the contract before signing a contract on any subject.
Before signing a contract on any subject, you must carefully read the contract in its entirety, including the attached appendices. As the contract deals with a more important subject/higher amount, it is recommended to read the contract more than once.
After reading the contract, make sure you understand the clauses/terms of the contract. If something is not clear, you must not sign the contract. In such cases, consult a contract law attorney or demand that the wording of the contract be changed to something that will be understandable and clear to you.
A contract cannot be signed in any case if you have not done a survey again and checked that the transaction is economical for you. Remember – you usually cannot cancel the contract on the grounds of economic inefficiency.
It is very useful to follow all these steps so that they do not claim against you for breach of contract, and so that you do not have to go to court.