Key Takeaways

  • Non est factum is a contract law defense used when a signer is mistaken about the nature of a document they signed.
  • It originated to protect illiterate individuals or victims of document fraud.
  • The doctrine is applied strictly and requires proving lack of carelessness and a fundamental mistake about the document's nature.
  • Courts balance protecting innocent third parties and rectifying genuine mistakes.
  • Successful invocation of non est factum is rare and requires strong evidence of misrepresentation or incapacity.
  • Modern examples emphasize that advice to seek legal counsel can undermine a non est factum claim.

Non est factum is a Latin phrase that means, "It is not his/her deed." It is used in contract law as a special defense allowing an individual to not fulfill the stipulations in a contract they have signed.

History of Non Est Factum

The doctrine is over a century old and was created for several reasons, including:

  • To apply in situations where people were illiterate during that time in history and were incapable of reading what they were signing.
  • As a remedy for forged documents.
  • To address fraudulent representations.
  • To apply in situations where someone had no idea what they were signing. 

Today, allowing a plea of non est factum is well-established and in use in several common law countries. 

Requirements for Non Est Factum

To successfully assert a defense of non est factum, the party must satisfy strict criteria:

  • Fundamental Difference: The document signed must be fundamentally different from what the signer believed they were signing.
  • No Negligence: The signer must not have been careless when signing the document. If negligence can be proven, the defense will fail.
  • Incapacity: Typically, the defense applies when the signer had some form of incapacity, such as blindness, illiteracy, or language barriers.
  • Misrepresentation: There must usually be evidence that the signer was misled about the nature of the document.

Courts emphasize that the doctrine is not a way to escape a bad bargain or poor decision. The threshold is high to prevent misuse​​.

The Paradox in Contract Law: Non Est Factum

The Latin phrase "consensus ad idem" is referred to when an enforceable agreement between two parties occurs because of a meeting of the minds. If either party or both parties do not understand any term in the contract, there is no consensus ad idem.

To put in place a blanket rule that would make contracts in this situation unenforceable could be problematic. A common law has evolved to prevent abuse of legal provisions and created rules dealing with mistakes. One type of mistake involves a party that is mistaken in the kind of contract to be signed.

An example would be someone signing away the deed to their home thinking the document they signed was simply a guarantee for a debt held by another person or they were witnessing a will. In this situation, the person signed the document under the mistaken impression of what the document was for. This would be an instance where non est factum would be used as a defense to avoid the contract.

Because of the complexity of non est factum, a case by case resolution is more advantageous than applying a generic rule or principle when governing the cases. In cases where non est factum is the plea, the aim is to strike a balance between the needs of the person who signed the document and whose consent is not valid and protecting any third party who may be innocent, having only acted on what they thought was a properly executed agreement.

Limitations and Risks of Non Est Factum

Because non est factum can undermine the principle of contract certainty, courts are cautious about applying it. Key limitations include:

  • Sophistication of the Signer: Businesspeople and individuals with commercial experience are unlikely to succeed in a non est factum defense.
  • Third-Party Rights: Courts are wary of invalidating contracts if innocent third parties would be unfairly prejudiced.
  • Requirement for Due Diligence: Signers are expected to read and understand documents or seek assistance if needed. Failure to do so often negates the defense​​.

Ultimately, the law prioritizes maintaining the reliability of signed documents while protecting truly vulnerable individuals.

Example of Non Est Factum

When using non est factum as a defense, its application is restricted to certain circumstances. The person using non est factum must show two things: that they were not careless and that the document they initially signed was not the same document they thought they were signing. 

The use of non est factum as a defense is prevalent among defendants who are intent on evading a contract because it renders a signed contract/agreement void and, therefore, unenforceable. This mode of defense has strict requirements, which requires the defense to confine its cases to those defendants who were unable to read the agreement. This could be due to illiteracy, although illiteracy on its own may not be enough. 

An example of illiteracy not being enough to void a contract involves a realtor and a real estate developer. The realtor wanted several agreements voided because his defense was he did not understand real estate development well enough nor did he know English. Thus, non est factum was considered as the defense. In this case, the defendant had the burden of proving his defense based on the requirements that must be met when using non est factum as a defense. 

At trial, it was shown through testimony that the realtor was, in fact, an experienced business person and capable of understanding documents and agreements written in English. He had also been advised to seek legal counsel before signing the agreements. The court found the realtor's claim that he would have no problem with signing a document that he had not read or did not understand to be unbelievable and ultimately held that the defense had not made a case for non est factum. The signed agreements remained binding.

This case showed that non est factum as a defense should only be used in special circumstances and that winning such a case rarely happens.

Real-World Case Examples of Non Est Factum

Several court decisions illustrate the careful application of non est factum:

  • Saunders v. Anglia Building Society (1971): A widow signed a document thinking it allowed her nephew to live in her house, but it transferred ownership. The House of Lords rejected her non est factum plea because she failed to take reasonable steps to understand the document​.
  • Petelin v. Cullen (1975): An illiterate man signed a document he thought was a receipt but was actually an option to purchase his land. The High Court of Australia upheld his defense, finding a real and fundamental mistake​.

These cases highlight the narrow, cautious approach courts take: non est factum will only succeed where there is clear evidence of a fundamental mistake and no negligence.

Frequently Asked Questions

  1. What does non est factum mean?

    Non est factum is Latin for "it is not [my] deed." It is a defense allowing a person to void a contract they signed by mistake without negligence.

  2. When can non est factum be used?

    It can be used when someone signs a document fundamentally different from what they believed it to be, provided they were not careless in doing so.

  3. Is illiteracy alone enough for non est factum?

    No, illiteracy alone does not automatically entitle someone to use the defense. They must also prove they took reasonable care before signing.

  4. Can businesspeople use non est factum?

    Rarely. Courts are unlikely to allow experienced or sophisticated individuals to escape a contract using this defense, especially if they failed to seek legal advice.

  5. How successful is a non est factum defense?

    Success is rare. Courts require clear evidence of misrepresentation or misunderstanding combined with proof that the signer was not negligent.

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