Legal question about adhesion contracts...

[Scruit]

An adhesion contract is a contract drawn up by one party that is presented to the other party as a take-it-or-leave-it proposition. Phone contracts, loan agreements, rental car agreements etc.

My question: Can you change the terms of an adhesion contract prior to signing it, if the agent asking you to sign the form does not object? Is the new contract binding upon the company?

Example: I rented a u-haul trailer a few years back. The stickers on the side of the trailer said 55mph max speed, the contract said 45mph max speed and the guy behind the counter "said" I could go at 65mph. In fact he demanded I do 65 so I could return the trailer early and let him rent it out again that day. If I didn't agree to do 65mph on my journey then he wouldn't rent to me.

When I went for the pre-rental inspection I took all the paperwork with me (even their copy, which I had not signed yet). After inspecting the trailer I crossed out the sentence with the 45mph speed limit and write "Both parties have agreed that this trailer is safe to operate and 65mph." before signing it it handing it back to the guy who hooked up the trailer (not the manager). He looked at what I wrote, chuckled, and shook his head, but did not object.

As I was pulling out of the parking lot I saw the manager come running over to me. Too late, I was gone. I got a phone call a couple minutes later telling me that I didn't have to do 65mph, and that I could return the trailer as late as I wanted.

So, was the change that I made the contract binding to them? ie If I crashed at 65mph due to a bad trailer they would normally point at the fine-print 45mph speed limit and disavow all responsibility. Would my modification have protected me?

Edited August 24, 2011 by Scruit

[redkow97]

your change isn't binding unless a qualified agent with authority to modify their contract has initialed the change. I doubt a court would find that the counter clerk has such authority at a U-Haul facility that probably has their rental agreements printed by some central corporate office.

Regardless of how it happened or what the guy at the counter actually agreed to, the only thing you can PROVE is that you wrote a change into their contract. You have no way of proving consent to that change.

So even IF he had the authority to agree to the change, it doesn't sound like you can prove that he gave consent.

[Scruit]

your change isn't binding unless a qualified agent with authority to modify their contract has initialed the change. I doubt a court would find that the counter clerk has such authority at a U-Haul facility that probably has their rental agreements printed by some central corporate office.

Regardless of how it happened or what the guy at the counter actually agreed to, the only thing you can PROVE is that you wrote a change into their contract. You have no way of proving consent to that change.

So even IF he had the authority to agree to the change, it doesn't sound like you can prove that he gave consent.

How am I supposed to know who has authority to change the contract? Does the contract need to have a clause that states who can and cannot change it? Sure, it proves that I wrote stuff on the contract. There's lots of stuff written on the contract. And all of it is set in stone once the contract is signed and the signed contract is accepted by the commencement of performance by the company. If the company does not consent to the change then they should not commence performance, rigth? I mean I cannot just say; "I started using their phone but I didn't really consent to pay for it"

The contract only exists as written. If the contract has been modified prior to the rental beginning (such that their copy has the modifications)then could it not be argued that them allowing the rental to commence is acceptance of the revised contract terms?

If I sign up for a phone with Verizon, for example, and I cross out the early termination fee, and the agent concludes the transaction despite the changes, that I would argue those changes ar epart of the negitiation and have therefre become part of the contract. Can they then hold me accountable for a clause in a contract which is not the one I signed?

[redkow97]

you can argue anything you want, so even if you research the case law on this, there will never be a definitive answer unless you actually go to court.

How are you supposed to know who has the authority to amend the contract? Start with common sense. The guy working the counter didn't draft the agreement; why would he be authorized to amend it? He's also behind the counter of a U-Haul store. Probably not your most sophisticated individual in the world.

Now if you can prove that he frequently amends contracts, or has done so with regularity in the past (for you, or other customers), then you're starting to show that he has exercised such authority without issue before, and his actions should be allowable here. But absent that proof, I think you're stretching the claim that he was an agent authorized to make the change. The trailer manufacturer likely sets the safe top-speed, so that may or may not be UHaul to begin with.

Commencing the rental agreement is not consenting to your modified terms because you can't time-stamp the hand-written change. Without their written consent (initials) on the change, there is no way of showing that you didn't add the amendment after they had already given you the trailer. Thus they would already have delivered on their agreement to perform before you modified the contract.

I agree that it would be cleaner for them to say, "we won't accept that contract w/ your scribbles on it," and make you fill out another one, but if they haven't actively accepted the change, there is no reason for them to think it would be enforceable.

again, you can argue whatever you want, I'm just providing counter-arguments, and telling you what I think the probable result would be.

Edited August 24, 2011 by redkow97

[Scruit]

I would think that a lay person would believe that any employee of a company engaged in getting you to sign a contract is authorized to amend it. I agree that the lot lackeys coudl not be assumed to have that authority.

I agree with your point about having their agent indicate acceptance of the change in writing. If they refuse then I just have to decide how important the contract is to me.

[jblosser]

How about if the counter guy (or the manager) and you BOTH initial the written-in change?

I would assume (perhaps incorrectly) that if a representative of the rental place initialed (and therefore agreed to?) the change, that the contract is now changed.

(I've not been to one minute of 1L classes, in case you couldn't figure that out).

[Scruit]

I think it's perfectly reasonable to assume that the man handing you a contract to sign is authorized to countersign amendments. But my legal training was in the UK and we didn't get into contract law.

There is also a risk that by amending the contract it could be found to no longer be an adhesion contract, so if some other section would otherwise be ruled unconscionable or "outside reasonable expectations" then I'd lose those protections.

"Outside reasonable expectations" is the concept that protects a person who hastily signs a gym membership from suddenly being told there is a clause that requires them to wash every other member's cars every week during the contract. Sure, you could actively choose to agree to it, but the courts recognize that people sign these things without reading them and won't enforce clauses that no reasonable person would expect. So lawyer's fees, reasonable collection practices, liability waivers, arbitration requirement etc are all enforced even though you didn't read those clauses because they are normal expected clauses - but it should be easy to get out of a clause that requires you to paint their building once a month.

[redkow97]

How about if the counter guy (or the manager) and you BOTH initial the written-in change?

I would assume (perhaps incorrectly) that if a representative of the rental place initialed (and therefore agreed to?) the change, that the contract is now changed.

Again, I don't remember the case law on this, but that certainly strengthens the argument by a LOT, because it establishes that both parties in fact understood and agreed upon the change of terms. It eliminates the argument that Scruit either changed t he term after it was signed, or that there was no "meeting of the minds" to begin with, because they both wanted 2 different terms.

That would also firmly legitimize your belief that the counter guy or manager was authorized to make such changes. Whether or not he is actually authorized by uHaul is still a jury question though. Depending on the circumstances, that might be really easy to prove, and it might be impossible.

Is this an actual claim, or just a hypothetical?

[Scruit]

Is this an actual claim, or just a hypothetical?

Utterly hypothetical. I read a bunch of horror stories about gym contracts. One I read was from a lady who complained that the gym's agent told her it was a month-to-month contract with no termination fee, and he covered the contract with his hand under the pretense of pointing at the line she needed to sign - when she asked him to move his hand he told he she was holding up other members and just sign it already, dammit, and he didn't give her a copy. The courts sided with the gym when she tried to cancel a few momths later and found it was a 3 year contract.

So I wondered if she could have take the contract from him and crossed out the early termination penalty and duration of contract terms that he claimed were irrelevant.

And of course once my brain set off down this path I started wondering about all the other garbage they have you sign for stuff. COuld I sign up for a phoen and ask them to waive the termination fee? And cross it out in the contract if they agree? (of course they will agree verbally and "forget" when it comes time to enforce the contract)

So, your responses have absolutely been of tremendous help. I know now that if I want to modify a form contract before it is signed the modifications have to be countersigned by someone that I can convince a jury that it was reasonable to for me assume was in a position to accept the changes. So in my uhaul example the yard lackey not objecting to the scribbed-in changes would not do much to legitimize those changes (even though it truly represented the agreement I had with the manager). However if I had them countersigned by the manager then I'm sute I'd be in a much stronger position.

Edited August 24, 2011 by Scruit

[redkow97]

I think a bad-faith in fair dealing claim would have been better for the old lady adn the gym.

I am a big fan of freedom of contract, and I think it is the signer's responsibility to read things before they sign them. That said, hurrying the signer through the process is unethical at best, and arguably coercive behavior.

I would think it comes down to how sympathetic the woman is in front of a jury. If she's a kind, soft-spoken woman in her 60's, then the gym wouldn't have dared take it in front of a jury.

If it was the type of early 40's loud-mouth you hear screaming at the 16 yr old cashier in the grocery store because they can't ring up her booze, then of course the gym would win, simply because the jury would see how much of a shrew the plaintiff is, and assume she's making it all up.

Credibility matters as much as the precedents.