Georgia Courts Reinforce Contract Principles
The Georgia Court of Appeals reinforced contract principles by denying rescission of a contract when the plaintiff failed to read the contract, and if they had, they would have been aware of a potential clause against any verbal representation. Further, the only type of fraud that can relieve a party of his obligation to read a written contract and be bound by the terms is a fraud that prevents the party from reading the contract. In Legacy Academy, Inc. v. Mamilove, LLC (A14A0718., July 16, 2014), Mamilove bought a daycare franchise from Legacy in hopes of receiving a large profit. In their rush to earn their profits, Mamilove blindly signed the franchise agreement, however, when the profits did not occur as they hoped, they brought this suit claiming fraud against Legacy.
The Supreme Court of Georgia ruled that the agreement was a fully integrated contract that contained a merger clause. This barred any terms outside of the agreement from altering the contract. Further, Mamilove had the ability to read and understand the contract before signing, and not reading the contract cannot later create fraud. In summary, no one can truthfully claim to have been defrauded in a matter about which he has full knowledge and opportunity to exercise his free choice. This ruling only furthers the importance of understanding every clause in a contract.
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