In the words of one Missouri court, the law “presumes that a party had knowledge of the contract he or she signed; and those who sign a contract have a duty to read it and may not avoid the consequences of the agreement on the basis that they did not know what they were signing.” Grossman v. Thoroughbred Ford, Inc., 297 S.W.3d 918, 922 (Mo. App. W.D. 2009).
Although the duty to read creates a presumption, the presumption can be overcome. Lonergan v. Bank of America, N.A., which was decided about a year ago, is one such case. In Lonergan, the United States District Court for the Western District of Missouri ruled on a motion to dismiss under Rule 12(b)(6) that the duty to read did not apply to the plaintiffs at this early stage in the proceedings (the motion to dismiss stage is very early in the litigation process, before evidence is developed).
The plaintiffs alleged that the true amount of monthly payments under a mortgage was concealed from the plaintiffs and that it differed materially from what had been represented to them. They also alleged that the settlement agent showed up to the closing late, didn’t afford the plaintiffs time to read the loan documents, and neglected to review the terms of the documents with the plaintiffs at closing.
The court held that under these circumstances, because the plaintiffs’ complaint alleged fraud, and because the presumption that parties to a contract have read the agreement only applies in the absence of fraud, dismissal of the suit would be inappropriate.