Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Thursday, February 20, 2014

The importance of reading the contract prior to signing it - Finding out in litigation the hard way



Read the contract: You are stuck with what you agree to by signing it. The court probably won't allow you to come up with a different "reading" when you later find that the wording does not suit you. 

Hagee cites no case law to support her contention that Felder had a duty to disclose his interpretation to her. Indeed, case law supports the opposite conclusion. See Pride Int'l, Inc. v. Bragg, 259 S.W.3d 839, 850 (Tex. App.-Houston [1st Dist.] 2008, no pet.) (holding director had no duty to disclose personal opinion regarding contract's interpretation during negotiations). "To the contrary, a person who signs a contract must be held to have known what words were used in the contract and to have known their meaning, and he must be held to have known and fully comprehended the legal effect of the contract." Tamez v. Southwestern Motor Transport, Inc., 155 S.W.3d 564, 570 (Tex. App.-San Antonio 2004, no pet.); see also Centella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (referring to "legal presumption that a party who signs a contract knows of its contents").

Moreover, even when a court construes a contract to determine the intent of the parties, it is the objective intent that controls; the court does not consider the parties' personal interpretations or subjective intent. Neel v. Tenet HealthSys. Hosps. Dallas, Inc., 378 S.W.3d 597, 605 (Tex. App.-Dallas 2012, pet. denied); Weaver v. Highlands Ins. Co., 4 S.W.3d 826, 831 (Tex. App.-Houston [1st Dist.] 1999, no pet.).

SOURCE: SAN ANTONIO COURT OF APPEALS - No. 04-12-00434-CV - 1/22/2014