Another contract Q: crossing stuff out

Factual Questions
1

Let’s say you’re buying a car. Everything is ready, you’ve picked out the car and have the financing arranged. Now you have to sigh the contract. While reading it, you find one or two odd lines you don’t like. Can you cross them out? What happens if you cross something out and the other party doesn’t notice and signs anyway? Is it still binding if they find it later?

2

IANAL: I believe that if you amend the contract by crossing out ALL parties have to initial. If it’s initialled then all parties have agreed to the amendment.
This is based on many years in a bank issuing load contracts but is not legal advice.

3

I’m not a lawyer, but one thing I do know about contracts is that one requirement for a valid contract is a “meeting of the minds.” That is, both parties have to understand and agree upon what is being contracted. It is hard to imagine an auto dealer not noticing that something is crossed out, but if it happens then there wasn’t the requisite mutual understanding of the agreement. No contract exists is my guess.

4
      • IANALE (IANAL either) but where I worked, if they received a contract for signature, they’d complete it and cross out whatever they didn’t like (usually this had been discussed at length already) and return it, and if the other party found it unacceptable then the contract was simply dropped and a new one proposed. Other companies commonly dealt with them the same way.
        ~
5

You can cross out lines, but both parties have to initial it to make it valid. This is to prevent one party from signing the contract and the other party crossing out the lines afterwards. Without the initials, the cross out is not considered valid.

6

IAAL. A “contract” is really the deal struck between the two parties–the terms upon which their minds met. The piece of paper with words on it that says CONTRACT at the top is only evidence of the contract, it’s not the contract itself because a contract doesn’t have a physical existence.

Therefore, imagine you cross something out of the contract and the other guy signs it, but then he acts like the crossed-out stuff is still a part of the deal. You sue him. The court’s job would then be to determine what the deal was between you two, and the contract would be used as evidence of that deal. Other evidence would be his testimony to the effect that he didn’t see that some of it was crossed out and you two didn’t discuss it. Assuming you tell the truth, you would also say that you didn’t discuss it with him before or after you crossed it out. Therefore, it seems the court would likely find that the part crossed out was still part of the deal. The court could also ignore the other guy’s testimony because it didn’t find it credible and hold that the crossed-out material was not part of the contract, and the other guy was just trying to weasel out of a bad deal.

The above was the analysis under the common law of contracts. It’s possible for a state to have a statute saying that all parties are held to have notice of any crossing out that takes place before execution of a contract (which would be a rather bizarre statute, but possible).

It’s also possible for a state statute to say that no crossing-out is valid or enforceable unless initialed by either party, but this isn’t the result that would be automatically reached under the common law. Absent such a statute, however, it’s a good idea to have both parties initial a crossing-out because the initials are good evidence that both parties meant the material to be excised from the contract.