Saunders v Anglia Building Society [1970] 3 All ER 961

Facts

• The case concerns the defence of non est factum in contract law, allowing a person to avoid liability for signing a document under a fundamental misunderstanding of its nature.
• The defence was raised where a party claimed to have signed a document believing it to be fundamentally different from what it actually was.
• Non est factum particularly protects vulnerable signers, such as the elderly or those with limited mental capacity, who may be susceptible to misunderstanding or deceit.
• The court addressed how carelessness in signing and the context of potential misrepresentation or undue influence impact the availability of the defence.

Issues

1. Whether a signer’s misunderstanding must relate to the document’s fundamental nature or merely to its detailed legal effects.
2. Whether the defence of non est factum is available when a signer has acted with some level of carelessness or neglect.
3. What burden of proof must be met to successfully establish the non est factum defence.

Decision

• The defence of non est factum is allowed only in rare cases where a serious error about a document’s fundamental nature is demonstrated.
• Mere misunderstanding of legal effects or specific terms is insufficient; the mistake must concern the document's core purpose.
• The claimant must show their level of care was not unreasonable in the circumstances; serious neglect will defeat the defence.
• The burden of proof lies with the person asserting non est factum to demonstrate both a fundamental error and an absence of gross carelessness.
• The court recognises a higher standard of care may be required from signers who are blind, uneducated, or otherwise vulnerable, but deliberate deceit can still excuse some neglect.

Legal Principles

• Non est factum invalidates a contract from the outset if established, treating it as never having existed.
• The defence is narrowly confined to protect the reliability of written agreements, applying only to fundamental failures of understanding regarding the character or core purpose of the document.
• The doctrine requires signers to exercise reasonable care based on their individual circumstances.
• Its scope is distinct from misrepresentation and undue influence, which may also provide relief but operate under different principles.
• The court balances protection for vulnerable individuals with the need to uphold the integrity of contractual relations.

Conclusion

Non est factum remains a rarely available defence requiring proof of a fundamental misunderstanding of a document’s nature and absence of gross carelessness. Its use is primarily to protect genuinely mistaken signers, particularly the vulnerable, while maintaining trust in written contracts as established in Saunders v Anglia Building Society.