Signing Documents

This pamphlet was prepared as a public service by the Washing-

ton State Bar Association. It contains general information and is

not intended to apply to any specic situation. If you need legal

advice or have questions about the application of the law in a

particular matter, you should consult a lawyer.

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Washington State Bar Association

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[email protected] • www.wsba.org

02-11

Consumer Information Published in the Public Interest

by the Washington State Bar Association

Signing

Documents

• Signing Documents

• Accommodating Others

• Oral Promises

• Making Payment Agreements

• Signing Contracts

• Leases and Rental Agreements

• Examining Documents Before

Signing

• Formalities in Signing Documents

• Breaking Contract Agreements

• Minimizing Your Risks

tions a consumer normally encounters, other documents

should also be studied and understood before being

signed.

Door-to-door and telephone sales agreements, repair

authorizations, and loan applications, for example, de-

serve careful consideration. Product warranties should also

be compared and understood before signing a purchase

agreement. Installation and service provisions should be

described in detail in a contract before you sign it.

People rarely take the time to examine the autho-

rization forms they are asked to sign when arranging

automobile service or repairs. Before signing, be sure

the authorization entitles you to complete, written work

orders and cost estimates. The agreement should also

provide for notication of major repairs before they are

undertaken. Finally, you should understand the liability

of the service facility for any damages to your car while

in its care.

Credit or loan applications should also be carefully

considered before being signed. These “applications”

may contain the necessary elements of a legally binding

and enforceable contract. Of particular importance are

your responsibilities under the agreement and the condi-

tions upon which the credit or loan is being granted. With

various forms of nancing now available, it is important to

read and understand credit applications and to compare

offerings from different sources.

Formalities in Signing Documents

Certain formalities must be observed when signing doc-

uments. In witnessing a will, for example, the witnesses

must sign the document in the presence of the person

making the will and in the presence of each other.

When you sign a document as a witness, be sure

you actually observe the afxing of the signature you

are witnessing. You may be asked to testify to such ac-

tion in court.

Some documents, such as property deeds, require

the signing to be acknowledged before a public ofcer

(usually a notary public) who testies that the signer is

known to him or her and that he or she is the one who

signed it.

Breaking Contract Agreements

Under certain conditions, you can legally cancel a con-

tract or avoid payments. For consumers, remedies are

sometimes allowed if a transaction involves deceptive

or fraudulent practices or “undue inuence.” Non-perfor-

your needs and situation. A brief consultation with a lawyer

before closing a transaction can help you avoid problems and

may also save time, money, and grief.

• Keep a copy. Obtain signatures of the proper persons, then

request and keep a copy of the document. Get a receipt for

any money paid. If necessary, record the agreement with ap-

propriate ofcials.

mance and consumer law violations may also be consid-

ered. Depending on circumstances and claims, you may

want to consult a lawyer for specic legal advice or repre-

sentation.

Minimizing Your Risks

You can decrease your legal risks and avoid misunder-

standings by taking certain precautions before signing

anything.

• Put the agreement in writing. This will reduce the

possibility for disputes. Although some contracts may be

either verbal or written, oral promises or assurances are

not binding.

• Know what you are signing. Don’t be misled or con-

fused by a title. A “receipt” may be a contract; a “state-

ment” may be a release of your claims; or a “contract” may

be a negotiable promissory note.

• Read everything in any document. Clauses in ne

print may be important. Verify that your obligations — and

expectations — are covered by the written agreement. Take

nothing for granted.

• Check the document. Be sure the dates, prices, names,

and conditions are lled in correctly. You are bound by what

it says, not by what you think it says.

• Acknowledge any modications with your initials.

If preprinted forms are used, language may be revised,

added, or deleted, but all alterations should be initialed by

the parties to the agreement.

• Sign each page of a multi-page agreement. Have the

other party do the same.

• Ask questions. Do not sign a document unless you un-

derstand what it means. Language clearly stating what you

want can be inserted. By reading the document and asking

questions, you will better understand your rights and liabili-

ties. Reviewing the document may also provide you with a

basis for negotiating its terms, and can familiarize you with

possible risks so you can consider alternatives. If you have

doubts about the meaning or effect of an agreement or

are uncertain about signing, seek information and advice.

• Consult a lawyer. Some documents or transactions can

be entered into without the assistance of a lawyer. Howev-

er, if considering an expensive purchase or a transaction of

major signicance, it is wise to consult a lawyer to discuss

the terms and consequences of the transaction. A repu-

table business person will not hesitate to let you have your

lawyer review documents. Your lawyer can provide advice

and assistance in negotiating and drafting terms that t

Signing Documents

People routinely sign documents

or forms without giving them much

attention. Too often, people do not

read these documents, thinking

the wording is “routine,” “standard-

ized,” or “too complicated.” Some

people mistakenly assume adjustments can be made at

a later date.

Keep in mind that you probably would not be asked

to sign a form or document unless someone thought

it was important. A contract describes agreements be-

tween parties, and signing one may impose both legal

and nancial obligations or requirements on you. This

pamphlet discusses common types of legal agree-

ments and explains basic practices to follow to avoid

misunderstandings or problems.

Certain precautions should be taken when signing

documents. Always read a document before you sign

it. It represents a highly legally binding agreement or

promise and, upon signing, you agree to what it says —

not what you think or hope it says. Once in force, it gen-

erally cannot be altered unless both parties agree. Fur-

thermore, with very few exceptions, such agreements

cannot be broken.

Examples of documents which people are frequent-

ly asked to sign include:

• Installment sale agreements

• Security agreements (when borrowing money or buy-

ing merchandise on a time payment plan)

• Earnest money receipts or real estate purchase and

sale agreements

• Leases or rental agreements

• Application forms (for credit, credit cards, loan, etc.).

• Repair authorizations or orders (for automobile or

home repairs)

• Purchase orders

The foregoing are examples. Some of them are

discussed in more detail in this pamphlet. However, no

matter what the form is called, read it carefully and ask

questions to be sure you understand and agree with the

terms before you sign. If an agreement involves com-

plicated technical language or an expensive item, you

may want to have your lawyer review the provisions be-

fore you sign. Finally, insist on receiving a copy of the

signed document.

Before You Sign

You signature, like your ngerprint, is unique. No one else

has one exactly like it, and only you can use it.

If uncertain about signing a document, seek informa-

tion and advice. It usually costs far less to prevent problems

than to remedy them. Your signature could legally bind you

to actions or payments. For your own protection, you should

clearly understand what you are signing, why you are sign-

ing, and what the consequences may be. Do not be rushed

or pressured into signing something before you fully under-

stand it. It is rarely possible to avoid legal obligations of an

agreement, once it is signed.

Accommodating Others

Even when you are not directly involved in a transaction,

you may at times be asked to sign an instrument or docu-

ment to accommodate someone else. Examples include

co-signing someone else’s promissory note or purchase

contract, endorsing a check, or signing a guaranty.

Afxing your signature to a document may cause

events of great consequence to you. If you sign a docu-

ment or instrument to accommodate some other person,

you will be personally liable for the obligation created by

that document. If the person you are accommodating

fails to pay or perform the obligations required by the doc-

ument, you will be legally required to do so. For example,

your signature on a note as a “co-signer” or your endorse-

ment of a check could result in your having to make it

good if the principal signer fails to pay.

Do not co-sign documents with someone else or sign

guaranties unless you have condence in the nancial abil-

ity of that other person and in his or her integrity. Further-

more, you should not sign a guaranty or co-sign a docu-

ment unless you are deliberately willing to risk being sued

if that other person does not pay or perform.

Oral Promises

As a general rule, a written contract is nal. Promises that

are made but not written into the contract are rarely con-

sidered by the courts. There are some situations when an

oral promise or representation will be legally binding and

enforceable, but you cannot depend on it; verbal promises

are usually risky and should be avoided. In most cases, a

written and signed document will supersede all oral discus-

sions and promises.

If, after entering a transaction, you feel you have been

misled by oral representations or promises, you may wish

to consult a lawyer. In some situations, oral claims or cer-

tain sales practices involving displays of samples or sales lit-

erature can be a basis for complaint and relief. This is particu-

larly true for consumer transactions, where many regulations

exist to protect against fraud or deceptive and unscrupulous

sales tactics. You can, however, often avoid problems by in-

sisting—before you sign the document—that oral promises or

representations be written into the agreement.

Making Payment Agreements

In some situations, it may be advantageous to buy merchan-

dise on an installment or “time payment” plan. Under this

arrangement, you will usually be asked to sign a document

called a “security agreement,” a “purchase agreement,” or an

“installment sales agreement.” Your rights and your liabilities

will be governed by the document, whatever it is called. “Buy

now and pay later” opportunities should not be accepted until

you fully understand what is involved.

Most consumer installment purchase transactions are

regulated by laws that require the document to set forth cer-

tain information. Furthermore, the seller must furnish you

with a signed copy of the agreement. Information that is gen-

erally required to be in the document includes:

• a description of the merchandise;

• the total cash price;

• the down payment;

• trade-in allowance (if any);

• the net cash price;

• the nance charge;

• the total amount to be paid in installments;

• the amount of each installment; and

• the method and period of time over which installments are

to be paid.

It may also be necessary for the seller to set forth in

the document a gure called the “annual percentage rate”

or “APR.” That gure tells you the percentage cost of cred-

it that you will incur each year as a result of signing that

agreement.

Even if the transaction is not legally subject to such dis-

closures, ask the questions you feel are necessary to give you

the essential information. You should also be sure the pro-

visions of the document are consistent with the information

you are given.

Signing Contracts

People considering the purchase of a home often sign a

“purchase and sale agreement” or “earnest money receipt.”

These documents are contracts that legally require the sell-

er to sell, and the buyer to purchase the property.

If the buyer refuses to purchase the property after

signing an “earnest money form” or “real estate purchase

and sale agreement,” the seller has the option of keeping

the earnest money deposit or of suing the buyer to force

purchase of the property.

The agreement also imposes obligations on the seller.

The seller cannot give the earnest money deposit back to

the buyer and refuse to sell. If there is a real-estate agent

involved in the transaction, the earnest money receipt or

agreement will also impose an obligation on the seller to

pay a real-estate commission or fee.

A purchase and sale of real property can be a complex

transaction. When making an investment as important as

a home, it is sensible to consult a lawyer and have him or

her review the documents before you sign anything.

Leases and Rental Agreements

When renting a home, apartment, commercial space, or

other property, you may be asked to sign a written contract,

usually called a “lease” or “rental agreement,” which should

cover all terms of the agreement with the property owner.

A lease establishes a tenant’s right to use property

for a specied term. City, county, and state regulations can

also affect the terms of a lease agreement.

Most leases say how much rent is to be paid, dates of

possession, notication requirements to terminate the lease,

responsibilities for damages, and other concerns. The docu-

ment might also cover restrictions on pets, subletting/trans-

ferring the lease, or occupancy and use of the premises.

Lease agreements might also mention other papers,

such as “house rules.” Do not sign the agreement until you

have read and been provided a copy of these rules. Make

certain all oral agreements are written into the contract

and be sure all blank spaces are lled in or crossed out

before you sign it.

Printed lease forms from an ofce-supply store or oth-

er source are sometimes adequate, but frequently they are

not. These forms may, for example, fail to answer specic

questions about your transaction, or they may not cover

certain agreements between you and the landlord. Do not

rely on promises intended for your situation that are not

included in the written contract.

Examine Documents Before Signing

Although retail credit contracts, real estate agreements,

and leases represent the more signicant nancial obliga-