Why You Should Always Review a Contract Before Signing in Michigan
In society, people are always rushing. We download videos fast, stream music instantly, and eat fast food on the go. However, the last place you should ever feel rushed is right before you review a contract before signing. As a Michigan real estate attorney with more than 35 years of experience, I cannot overstate how many clients come through my door in a panic because they endorsed an agreement without understanding what was in it.
Whether it involves a purchase agreement, a land contract, an employment agreement, or a business sale, every written contract carries legal obligations that can follow you for years. Taking 24 hours to read and understand a document — or to have an attorney review it — is one of the simplest and most important steps you can take to protect yourself. In this guide, I will explain why you should always review a contract before signing, what the law says about your obligations as a signer, and how an experienced attorney can help you avoid costly mistakes.
The 24-Hour Rule: Why You Should Never Sign Under Pressure
Here is a rule I share with every client: if someone presents you with a contract, do not sign it on the spot. Instead, take at least 24 hours to review the document carefully. This applies whether the agreement is a real estate contract, a business deal, an employment offer, or a service agreement.
Why 24 hours? Because pressure is the enemy of good decision-making. Salespeople, real estate agents, and even well-meaning business partners sometimes create a sense of urgency around signing. They may tell you the deal will disappear, that the terms are “standard,” or that there is nothing to worry about. In my experience, those assurances often turn out to be wrong.
Additionally, taking time allows you to read the document more than once. The first read-through helps you understand the general terms. The second read helps you catch details you missed — especially in the default and termination provisions that most people skip entirely. If anything in the document seems confusing or concerning, that 24-hour window gives you time to consult with an attorney before you commit.
Michigan’s “Duty to Read” Doctrine: What It Means for You
Many people assume that if they did not read a contract, they cannot be held to its terms. Unfortunately, the law says otherwise. Under a well-established legal principle known as the “duty to read” doctrine, courts presume that a person who signs a contract has read and understood every word.
In Michigan, the courts have held that it is presumed that one who signs a contract has read and understands it. In other words, your signature on a document is treated as your acknowledgment of everything in that document — even if you never actually read it. Furthermore, it has been established that failure to read a contract is not a defense to enforcement of the contract. Additionally, the courts have confirmed that failure to read a contract is generally not grounds for rescission absent fraud, artifice, or deception.
As a result, if you sign a contract in Michigan without reading it, you will almost certainly be bound by its terms. The courts will not rescue you simply because you were in a rush or trusted the other party’s verbal assurances.
Limited Exceptions to the Duty to Read
There are narrow circumstances where courts may excuse a party from the duty to read. These exceptions typically involve situations where the other party engaged in affirmative misconduct. Specifically, courts have recognized exceptions for:
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Fraud or misrepresentation: If the other party actively concealed or misrepresented the terms of the contract, you may have grounds to void the agreement.
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Duress or undue influence: If you were coerced or pressured into signing through threats or improper influence, the contract may be voidable.
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Unconscionability: If the terms are so one-sided and oppressive that no reasonable person would agree to them, a court may refuse to enforce the contract.
However, these defenses are difficult to prove and require substantial evidence. Therefore, the safest approach is always to read every word before you sign.
Why the First 20% of a Contract Can Mislead You
Here is something I tell every client: the first 20% of most contracts contains the exciting parts — the purchase price, the services being provided, the compensation, or the property description. This is the section people read because it represents what they are looking forward to. You want to buy a home, land a new job, or close a business deal. Consequently, the positive terms at the beginning create momentum that encourages you to sign quickly.
However, the remaining 80% of the contract is where the real substance lives. These sections typically contain default provisions, termination clauses, liability limitations, indemnification obligations, and dispute resolution requirements. In contrast to the opening terms, these provisions define what happens when things go wrong — and things do go wrong more often than most people expect.
For example, a contract dispute over a default provision can cost tens of thousands of dollars to resolve. If you had simply read that provision before signing, you might have negotiated different terms or walked away entirely.
Contract Contingencies in Michigan Real Estate
One area where failing to read a contract creates especially serious consequences is Michigan real estate. Real estate purchase agreements typically contain several critical contingencies — conditions that must be met before the sale can close. If you miss these contingencies or fail to act within their deadlines, you can lose significant legal protections.
Inspection Contingency
An inspection contingency gives the buyer a specific window of time — often 14 days after acceptance — to have the property professionally inspected. If the inspection reveals serious problems such as foundation issues, mold, or faulty wiring, the buyer can renegotiate, request repairs, or back out of the contract entirely without penalty. If you miss the inspection deadline, however, you may waive this right completely.
Financing Contingency
A financing contingency protects the buyer by allowing them to cancel the agreement if they cannot secure a mortgage within the specified time frame. This is particularly important because mortgage approvals can fall through for many reasons — job loss, credit issues, or changes in lending standards. Without this contingency, a buyer who cannot get financing may forfeit their earnest money deposit and potentially face a breach of contract claim.
Appraisal Contingency
An appraisal contingency requires that the property appraise at or above the purchase price. If the appraisal comes in lower than expected, the buyer can renegotiate the price or withdraw from the contract. In a competitive Michigan real estate market, some buyers waive appraisal contingencies to make their offers more attractive — but this is a risky strategy that should only be pursued with legal advice.
Example: I recently had a client — a young man purchasing a newer construction home for approximately $600,000 with a $30,000 earnest money deposit. He did not read his contract carefully and was having second thoughts a couple of weeks after signing. When he called me in a panic, I reviewed the agreement and discovered he had already missed his inspection period contingency. Fortunately, the financing contingency was still active, and because his job security had become uncertain, his mortgage lender was unlikely to approve the loan. That financing contingency ultimately became his exit from the contract. Had he not had that contingency — or had it already expired — he could have lost $30,000 or more.
Michigan’s Statute of Frauds: When Contracts Must Be in Writing
Understanding when a contract must be in writing is another critical reason to involve an attorney in your contract review process. Michigan’s Statute of Frauds requires certain types of agreements to be in writing and signed by the party to be charged. These include:
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Agreements that cannot be performed within one year
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Promises to answer for the debt of another person
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Agreements made in consideration of marriage
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Agreements related to the sale of an interest in real estate
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Agreements to pay a real estate commission
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Promises by a financial institution to lend money or extend credit
For real estate transactions specifically, the law provides that no interest in real estate can be created or transferred unless it is in writing and signed by the person creating or transferring the interest. This means that verbal promises about real estate deals are generally unenforceable in Michigan.
As a result, if you are entering any agreement related to real estate, a land contract, deeds, or business transactions, having the agreement in writing is not just a good practice — it is a legal requirement in many cases.
What an Attorney Looks for When Reviewing a Contract
When clients bring contracts to my office for review, I examine far more than just the purchase price or headline terms. Specifically, an experienced contract attorney will evaluate:
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Default and breach provisions. These clauses define what happens if one party fails to meet their obligations. They often include penalties, forfeiture of deposits, and the right to pursue legal action.
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Indemnification clauses. These provisions can require you to cover the other party’s legal costs and damages in certain situations — even if you did nothing wrong.
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Dispute resolution clauses. Some contracts require arbitration instead of litigation, limit where lawsuits can be filed, or include class action waivers.
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Termination provisions. How can you exit the contract? What are the penalties for early termination? Are there automatic renewal clauses that could extend your obligations without your knowledge?
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Compliance with law. Not all contract terms are enforceable. An experienced attorney can identify provisions that may be void, unenforceable, or in conflict with statutes, including requirements under the Seller Disclosure Act for real estate transactions.
The cost of having an attorney review a contract before you sign is almost always a fraction of what it costs to litigate a contract dispute after the fact. In other words, spending a few hundred dollars on a review today can save you tens of thousands of dollars tomorrow.
Common Mistakes People Make When Signing Contracts in Michigan
Over more than three decades of practice, I have seen the same contract mistakes repeated over and over. Here are the most common ones:
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Trusting verbal promises over written terms. People often rely on what the other party said verbally, only to discover later that the written contract says something entirely different. Under the law, the written agreement typically supersedes any prior verbal understandings.
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Skipping the “boilerplate” sections. The so-called standard language at the end of a contract — governing law, jurisdiction, severability, and assignment provisions — can have major consequences.
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Not understanding earnest money provisions. In Michigan real estate transactions, earnest money deposits can be significant. If you do not understand the conditions under which your deposit is refundable, you could lose it entirely.
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Signing on behalf of the wrong entity. If you own a business, failing to sign as a representative of your LLC or corporation — rather than in your individual capacity — can expose you to personal liability.
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Assuming you can easily cancel. The law generally does not provide a “cooling off” period for most contracts. Once you sign, you are bound.
Frequently Asked Questions
Why should I have a lawyer review a contract before signing? An attorney can identify unfavorable terms, explain complex legal language in plain English, and flag provisions that may not be enforceable. The cost of a contract review is typically far less than the cost of resolving a contract dispute in court.
What happens if you sign a contract without reading it in Michigan? Under the “duty to read” doctrine, you are presumed to have read and understood every term of a contract you sign. Failure to read a contract is generally not a defense to its enforcement.
Can you get out of a contract you didn’t read in Michigan? In most cases, no. However, limited exceptions exist if the other party engaged in fraud, misrepresentation, duress, or undue influence. These defenses are difficult to prove, so the best approach is to always read the contract before signing.
What is the duty to read doctrine in Michigan? It is a long-standing legal principle that presumes a person who signs a contract has read and understood its contents. The courts have consistently applied this doctrine, holding that ignorance of contract terms is not an excuse for failing to meet your obligations.
How long should I take to review a contract before signing? At minimum, take 24 hours. For complex agreements — such as real estate purchase agreements, business contracts, or employment agreements — you may need several days for proper review.
What contract contingencies should I look for in a real estate purchase agreement? The most important contingencies include the inspection contingency, the financing contingency, and the appraisal contingency. Each contingency has a specific deadline, and missing that deadline can waive your protections entirely.
Do I need a lawyer to review a real estate contract in Michigan? While the law does not require an attorney to be present at a real estate closing, having a lawyer review your purchase agreement is strongly recommended. An experienced Michigan real estate attorney can protect your interests and help you avoid costly mistakes.
About David Soble: David is a seasoned real estate and finance attorney with more than 35 years of experience, combining his background as a “big bank insider” with a commitment to demystifying complex legal issues for his clients. As the founding attorney of Soble Law (Soble PLC), he leads a specialized team in Michigan and Ohio that handles real estate transactions, contract disputes, probate, and financial litigation.
Disclaimer: The information in this article is for general educational purposes only and does not constitute formal legal, financial, tax, real estate, finance, probate, or any other professional service or advice. Reading this content or contacting us does not establish an attorney-client relationship. Every situation is unique and laws change frequently, so you should always consult with your own qualified attorney or professional advisor before making any decisions.
