We’ve all heard that argument before. Once again, a New York Appellate Court rejected the argument in a commercial transaction. You can’t get a lot clearer than having a court say that people who sign a loan agreement are “presumed to know the contents of the instrument [they] signed and to have assented to such terms.” The court went on to say, “even if, as he testified, [the guarantor] failed to read the agreement before signing it, that does not excuse him from performing.”

We don’t recommend that banks hand loan documents to commercial borrowers at the last minute. We always give our commercial loan borrowers, or their attorneys, a complete set of loan documents in advance so that they have a chance to review them. We recommend that you do the same, and give the borrower and its representatives a chance to make a reasonable decision.