Question: My company has a contract to receive services from another company. I initialed all but one page of the contract. In the spot, however, which says “I understand this entire contract and agree to be legally bound by it”, I printed my name, my title, and the date in the spaces provided, but never actually signed it. I only initialed the bottom of the page. There is also a schedule attached to the contract that I signed. Does my signature on the schedule and my initials, printed name, title, and date make me legally bound to the entire contract?
Answer: There’s a popular misconception out there that legal arguments are regularly won or lost based on technicalities. And while it certainly has happened that people have made procedural mistakes that totally undid what they thought they were accomplishing (e.g., the husband and wife who accidentally sign each other’s wills instead of their own, the real estate deed that describes the neighboring property, etc.), judges are people too, and they don’t like to feel as though they are being manipulated into reaching an unfair or nonsensical result by an opportunist who thinks he found a loophole. As my contracts professor used to say, “The law is not an ass.” By which he meant, contrary to how a lot of people think the law works, courts aren’t in the business of allowing people to weasel out of their legal responsibilities by requiring rigid adherence to symbolic gestures.
With certain specific exceptions, a contract is not required to be in writing, let alone signed, in order to be binding. As long as there has been a clear offer by one party, an acceptance of that offer by the other, and an exchange of consideration between them, a contract exists. And sometimes you can be legally bound by your promises even without these elements.
But before you throw up your hands and assume that you are going to incur a large amount of liability here, stop and carefully consider what the amount of damages at issue could be. Another popular misconception is that a primary purpose of civil lawsuits is to punish wrongdoers. It’s not. That’s the criminal justice system’s job. With certain rare exceptions, the purpose of civil lawsuits is only to make a damaged party whole, to the extent possible. No more, no less. That means that if you contracted with someone to pay $500 in exchange for a certain service, and they fail to perform that service, you are entitled to receive your $500 back. Unless the contract includes an enhanced damage provision or a state statute allows for it, you don’t get extra money to compensate you for your hassle or to punish the other party for failing to live up to its obligations. So before you panic, calculate the amount of damages your breach of the contract could cost the other side. And then decide how to proceed from there.