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Signing your name on the dotted line generally means that you have entered into a contract. But what happens if someone has signed incorrectly? If you sign a document incorrectly, the contract may become unenforceable. If a contract is unenforceable, a court cannot force either party to perform its obligations under the contract. However, an incorrect signature does not mean that the contract falls apart altogether. There are a few factors that will determine whether the agreement is still legally binding.

Presumption of a Legally Binding Relationship

The law presumes that when people enter into commercial agreements, they intend for the terms of the contract bind them. The agreement will remain legally enforceable unless you can show that the party had no intention to be bound to the agreement’s terms. If parties have been performing their obligations under a contract, this is a fair indication of their intention to be bound to the agreement. This is regardless of whether they have signed their name incorrectly or not.

Case Study: A Partnership Turned Sour

For example, two business partners have been running a business together under a partnership agreement they signed a while back. Things go badly, and one person decides they want to leave the partnership. However, the duration of the partnership they agreed to has not ended yet. If the person who wants to leave has signed their name incorrectly, can they argue that the agreement is invalid?

If the partners have been working for a while per the terms of the agreement, it is unlikely to be invalid. This is because the parties’ actions following the terms of the agreement show a clear intention to be bound by the agreement. It would be hard to prove otherwise on an incorrect signature alone.

Case Study: Signing Your Name in the Wrong Spot

As another example, say you have mistakenly and incorrectly signed your name in the spot meant for another person. Does this mean that you have to perform the obligations of that other person?

It is highly unlikely that you are going to have to perform the contract as the other person. Common sense and the tendency to preserve commercial relationships wherever possible will make sure that the contract can still be performed as intended.

Signing A Deed

Unlike an agreement, you do not need an exchange between the parties to execute a deed.

For example, the exchange could be a payment of money or an agreement to do something in exchange for something else.

Instead, a deed serves to formalise a binding promise or commitment between parties. Because there is no exchange between parties to a deed, it is difficult to determine the parties’ intention to be bound based on their performance of the deed alone. Therefore, getting party names and signatures right on a deed is critical.

Key Takeaways

Getting the details right on an agreement is the best way to ensure that people enter into an agreement with total awareness of their accompanying rights and responsibilities. Also, getting an agreement right from the outset is the best way to avoid future expenses and headaches. One of the details especially important to an agreement is your signature. However, an error in the signing of an agreement does not automatically mean that it will become invalid. The intention of the parties involved largely determines the enforceability of an agreement. If you have any questions about your deeds, contracts or agreements, get in touch with LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.

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