329 A.3d 208
Vt.2024Background
- Plaintiff Joan Falcao loaned $16,000 to defendant Mitchel Richardson for the purchase of cattle, formalizing the transaction with a signed promissory note including an attorney's-fees provision.
- The parties had a history of informal collaboration and discussed entering a more formal farming partnership, but no partnership agreement was finalized.
- Defendant signed the promissory note without reading it, after plaintiff encouraged him to do so, trusting plaintiff with the paperwork.
- The trial court declined to enforce the promissory note as written, instead awarding plaintiff damages under unjust enrichment, finding that the note did not reflect the actual agreement between the parties.
- Plaintiff appealed, arguing the note was unambiguous and enforceable by its terms, including the attorney’s-fees provision.
- The Vermont Supreme Court reviewed whether the note was enforceable and whether considerations of ambiguity or unconscionability should preclude enforcement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of promissory note | Note is unambiguous and enforceable as written | Note does not accurately reflect agreement and was not negotiated | Promissory note is enforceable by its terms |
| Effect of failing to read contract | Failure to read is not a defense; parties bound to terms they sign | Argued surprise at attorney’s-fees clause; imbalance in bargaining power | Failure to read is not a defense to enforcement |
| Contract of adhesion/unconscionability | No adhesion or unconscionability; note fairly presented, not hidden | Claimed unequal bargaining power, lack of choice, unfair surprise | No evidence of adhesion or unfairness; not unconscionable |
| Role of surrounding circumstances | Only relevant if the contract is ambiguous or unfair; none found here | Circumstances show lack of mutual agreement on fees clause | Circumstances do not override clear, unambiguous contract |
Key Cases Cited
- Johnson v. Hardware Mut. Cas. Co., 108 Vt. 269 (parties are bound by the clear and unambiguous terms of their contract)
- Lamoille Grain Co. v. St. Johnsbury & Lamoille Ctny. R.R., 135 Vt. 5 (signing a contract without reading it does not relieve a party of its terms)
- Maglin v. Tschannerl, 174 Vt. 39 (contract unconscionability may depend on bargaining power or opportunity to understand)
- KPC Corp. v. Book Press, Inc., 161 Vt. 145 (meaningful opportunity to understand contract terms affects enforceability)