Isa bank responsible for typographical errors in their contracts?

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Isa bank responsible for typographical errors in their contracts?

While researching some old paperwork, I found a contract where I had borrowed money using a CD as collateral. The contract stated the CD being used for collateral was in an amount that was much higher than the purchase amount. Is the bank responsible for crediting me with the higher amount. It is kind of like the old monopoly card “Bank error in your favor, collect $200”.

Asked on June 30, 2011 under Bankruptcy Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately no--the bank does not have to credit you with extra money, to make your CD equal in value to what they had listed as the collateral. Courts do not slavishly enforce the literal terms of contracts--they enforce the parties'  demonstrable intent. Courts accept that minor errors and suboptimal or sloppy drafting occurs in contracts. In this case, the court would almost certainly conclude that the intention was simply to use this CD as collateral. So (1) they ignore an error about how much was in the CD; and (2) more importantly, this was not an agreement to pay you money, such as to settle a legal claim--it was a loan agreement using a CD as collateral. The intention of the agrement was not to make you CD equal some certain amount, so the courts would *not* interpret a loan agreement with collateral as requiring the bank to gross up your collateral's value.


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