`NON EST FACTUM: BURDEN TOO HIGH?

Updated: Aug 6, 2021

~By Tridib Mandal

2nd Year B.A.LLB(Hons.)

The WB National University of Juridical Sciences

Introduction

The law of contracts, which is essentially based on the doctrine of consensus ad idem, i.e., meeting of minds between the parties, provides certain defences to the parties when such meeting of minds between them is frustrated. One of such defences is the doctrine of Non-est factum. The Latin phrase ‘Non est factum’ directly translates to mean that ‘this is not my deed'.[i] This defence in contract law allows the signatory to claim that the document he/she signed was not accompanied by his/her mind, in other words, the document signatory signed was different from what he/she thought was signing. This renders a contract completely void on grounds of mistake as there has been no ad idem between the parties, providing relief to the aggrieved signatory. This doctrine is explicitly restricted only to the written documents and deals with disputes regarding signatures made by one of the parties. Though the courts initially allowed only people who had not physically executed the document to avail the defence, later it was expanded to provide protection to the blind, illiterate, and people who have been induced fraudulently into signing of the document.[ii] The case of Saunders v. Anglia Building Society[iii], laid down the modern approach for the defence of non-est factum, held that to claim the defence, one has to prove that the document was fundamentally different from what he/she thought had signed, there was no negligence on their part and there was a fraudulent explanation by the person relying on whom he/she signed. However, the courts have ruled that the burden that lies upon the aggrieved party to avail this defence is quite heavy. This paper, through various case laws, analyses the burden of proof upon the party alleging non est factum to conclude whether the burden placed is justified.


Burden of Proof

The courts have generally been critical about the burden of proof upon the party contending relief by availing the defence. One of the earliest cases on this issue is Foster v. Mackinnon.[iv]In the following case, the claimant was induced by fraud to sign a bill of exchange which was represented to him as a guarantee. Although the court did not explicitly address the burden of the aggrieved, it examined whether the claimant party had been negligent while signing the documents. In the landmark case of Saunders v. Anglia Building Society[v], where one widow was fraudulently induced by her nephew’s friend, Lee, to sign a deed which she thought was a gift deed to her nephew, but was actually a gift to him, which he later mortgaged, the House of Lords held that burden of proof upon the claimant disputing the validity of the signature is heavy and it needs to be proved that the document signed was fundamentally different in contents, not merely in characters, and that there was no negligence on claimant’s part. Later, in the case of Petelin v. Cullen[vi], the court reiterated the same principle and held that the document must be fundamentally different than what the signatory thought and there shouldn’t be any negligence. In the case of The First National Bank of Chicago v How Lee Realty Pte Ltd[vii], the court pointed out the heavy burden of establishing the doctrine of non-est factum rely on the party claiming relief by challenging the signature. In C F Asset Finance Limited v Okonji[viii], the court held that ‘... a person may not raise the defence of non-est factum if he has been guilty of negligence in appending his signature to the document which he wishes to disown...’ and ‘...There is a heavy burden on the person who seeks to invoke the remedy. He must prove that he took all reasonable precautions in the circumstances.’

In the case of Selvarasu Kounder v. Sahadeva Kounder[ix], the Madras High Court, referring to a few authorities held that, for availing the benefit of this doctrine, the person has to prove that his mind did not accompany the signature, so much so that the document signed was fundamentally different from what he knew he signed. In the case of Mathu v. Cherchi[x], the Kerala High Court held that the plea of non-est factum would not be available to an able-bodied person too busy to read the contents and had not taken sufficient care, except where he had been a victim of fraud.

Now the question that arises is regarding such heavy burden being placed on a person who is apparently blind, illiterate, or fraudulently induced to sign, and whether the burden is justified, or whether it should be left on the courts to infer it from the facts rather than shifting the burden on the innocent party.

According to me, two things must be taken into account while analysing the burden placed on the claimant party. They are the overall impact on the reliability of signatures in documents and the vulnerability of innocent third parties.

It is well known that signatures act as indicators of authenticity, genuineness and makes a document reliable for people and to the world at large. However, if the burden of proof is reduced on the person availing this defence, the overall reliability of signatures in contractual transactions or any other transactions will suddenly reduce. It might open floodgates of cases with signatures being challenged by parties at every instance, in a way reducing the efficiency of transactions and reducing reliability and trust between the contracting parties.

The next concern is regarding the innocent third parties who have no idea about such fraudulent inducement and has entered into the contract with good faith. For example, in Saunders v. Anglia Building Society[xi], the Building society was the innocent party having o idea about the dispute between Galilee and Lee. If such a burden is reduced and claimant parties get away with their disputed signatures easily, the innocent third parties will be tremendously affected.

It is for this reason that the courts have been restrictive in their approach while dealing with cases of non est factum where the burden of proving that the signature made by the claimant did not accompany his/her mind and has placed a heavy burden on the person seeking to nullify the deed on account of the signature being made under a mistake with the mind not accompanying the signature.


Conclusion

Therefore, I believe, the burden placed on the party contending the deed void signed by him on grounds of non est factum is justified on the above-mentioned grounds, otherwise it might lead to a lot of frivolous cases being filed, destabilising the overall structure of contractual transactions and their reliability.

[i] Bortey Lamptey, The Plea of Non Est Factum, 11 REV. GHANA L. 125 (1979). [ii] Simon Connell, Not My Doctrine: Finding a Contract Law Explanation for Non Est Factum, 47 VICTORIA U. WELLINGTON L. REV. 245 (2016). [iii] [1970] UKHL 5 [iv] (1869) LR 4 CP 704 [v] [1970] UKHL 5 [vi] (1975) 132 CLR 355 [vii] [1981] 1 MLJ 183 [viii] [2014] EWCA Civ 870 [ix] (1998) 1 MLJ 209 [x] (1990) 1 KLT 416 [xi][1970] UKHL 5


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