Cases of Interest.

shutterstock contract

The (not so) fine print.

The recent case heard in the local District Court illustrates that the “fine print” can bite you.

The president of a local contractor entered into two agreements for advertisements in the Yellow Book. Yellow Book successfully sued for past due payments, interest and attorney’s fees. Of interest were the contract provisions that electronic copies (presumably PDFs) stand as the contract and the language of the contract imposing personal liability on the advertiser’s president.

HIBU, Inc., formerly Yellow Book received a judgment against the advertiser and the president, individually, for the past due balance, interest at 18% per year (bank interest now is less than 1%) and attorney’s fees of 25% of the amount collected.

The language of the contract, as extensively quoted by the court, seems to be the product of years of litigation and experience in heading off defenses to payment. In fairness to the plaintiff, once a print advertisement is placed in a publication, such as Yellow Book, the advertisement is available throughout the period of the contract and beyond. It is understandable, then, that the advertising company, having provided the benefit, wants to receive payment.

The cautionary tale, however, is that as John D Rockefeller said “a contract is a contract”, once signed it will be binding, in most cases. We are all presented with “boilerplate” form contracts that have all kinds of language in fine print or on the reverse side. Prudence requires that you read and understand that language; you will be bound by it.

Importantly, corporate officers must take care that they do not undertake personal liability for a corporate obligation.
hibu Inc. v. Melfi Group Contracting Corp., Slip Copy (2014),45 Misc.3d 1227, Dist. Ct., Nassau County 2014 N.Y. Slip Op. 51741.

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