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Small Print Isn’t Always Unfair: Unraveling Contract Enforceability in Business

May 16, 2023

Posted in Uncategorized

In the world of business, contracts are the lifeblood of transactions. But how do font size and readability play into the legality and enforceability of these agreements? A recent case in California, Fuentes v. Empire Nissan, provides some fascinating insights that could shape your understanding of contract law.

The Two Elements of Contract Enforceability

Contract enforceability generally hinges on two elements: procedural and substantive unconscionability. Procedural unconscionability refers to unfairness in the contract formation process, such as coercive tactics or unclear language. Substantive unconscionability, on the other hand, is about the fairness of the contract’s terms themselves.

Tiny Fonts and Contract Fairness

Fuentes v. Empire Nissan shed light on the relationship between font size, readability, and these two types of unconscionability. The California appeals court clarified that tiny font size and unreadability issues relate to procedural unconscionability, not substantive. In essence, the court asserted that even if a fair contract were written in minuscule font, its substance would remain fair. The fairness of a contract’s terms is a separate issue from its readability.

Potential Implications for Your Business

This ruling could have profound implications for businesses. It suggests that even if an agreement is hard to read due to a small font or complex language, it may still be enforceable, provided the terms are fair. However, it’s worth noting that the court does not condone practices that could surprise or mislead a party during contract formation, such as using baffling legalese or imposing time pressures.

Avoiding Contract Pitfalls

While this ruling provides some clarity, it’s crucial for business owners to ensure their contracts are fair, understandable, and transparent. Unreadable contracts can still create potential for surprises and misunderstandings that could lead to litigation. Therefore, while the font might not affect the fairness of your contract, it’s still vital to consider the overall readability and accessibility of your agreements.

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Contract law can be complex, and the consequences of getting it wrong can be severe. Are you confident in your contracts’ fairness and readability? If not, it’s time to seek professional help to ensure your contracts stand up in court.