Clients shouldn’t sign documents they can’t understand or even read – Preparing a ‘clarity copy’

Have you run into a situation where the Agreement of Purchase and Sale is unreadable? Printers, scanners and fax machines can sometimes produce illegible documents after too many revisions.

One of our employees here at RECO said that at one time, he would frequently see offers faxed back and forth to the point where they became a dark smudge. He remembered a case where a dispute arose from a client who could not understand what was written in the transaction document because it was simply unreadable. Although fewer complaints about written and legible documents are coming in these days, it’s still an issue that crops up from time to time.

So what are you supposed to do with it? Should your client still sign the document?

The Code of Ethics under the Real Estate and Business Brokers Act, 2002 requires salespersons and brokers use their best efforts to ensure that any agreement relating to a trade in real estate is not only in writing, but legible. If you come across an unreadable document, ensure every party receives a readable copy because both parties must be able to fully understand what they are signing.

For these scenarios, a buyer’s sales representative prepares what is sometimes called a “clarity copy” of the original transaction document. Depending on how illegible the original transaction document is, clarity copies can be used in one of two ways:

    • If the original document is messy but still legible, your client will still sign the original Agreement of Purchase and Sale, and the clarity copy would be stapled to the offer as a reference. Or;
    • If the document is too messy to understand, a clarity copy would be produced to act as the official transaction document. This version of the document, once checked for accuracy, will be signed by the parties and used as the official transaction document in the course of the trade.  This kind of clarity copy should state that it supersedes any previous version of the agreement.

We encourage consumers to be sure that they read and understand everything in a contract before they sign. Likewise, a sales representative should be ready to answer any questions that a client may have about the contract, and in the case of a smudged document, consider preparing a new document for the client before they sign.

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