Maker's Liability for a Contract That Was Induced by Fraud In the Factum
In Campco Distributors, Inc. v. Fries (1987), 42 Ohio App.3d 200, 203, 537 N.E.2d 661, the Second Appellate District observed:
Generally, the rules as to mistake and relief against mistake which apply to contracts apply to guaranty agreements.
A unilateral mistake by the guarantor as to the nature of the underlying transaction or by the creditor as to the capacity in which the guarantor signed may not be the basis for relief from the guaranty contract.
The guarantor must necessarily be required to read the guaranty, to inquire as to facts which would be apparent to a reasonable person, and to understand the legal significance of the document which he is signing.
Any mistake which could have been remedied by due diligence and which is not a result of imposition practiced on the guarantor by the creditor, or one acting under the creditor's authority, is not a basis for rescinding the guaranty contract if the creditor reasonably relied on the promise of the guarantor. Ibid., citing 38 American Jurisprudence 2d (1968), Guaranty, Section 56.
Thus, though Ohio courts have refused to hold a maker liable on a contract that was induced by fraud in the factum, they " have been reluctant to find that the signing of an instrument was induced by fraud in the factum where the deception is attributable to negligence on the part of the maker.
A frequent example of this is where the maker is of ordinary mind and is able to read and write and yet, in reliance upon the representation of another, he signs an instrument without reading it, even though he has had full opportunity or ample time to read the instrument." Imperial Aluminum, Inc. v. Persuric (Aug. 6, 1981), 8th Dist. No. 42674, 1981 Ohio App.
Therefore, "the law of Ohio seems to be clear that a person who is able to read a document he signs but fails to do so when the opportunity is afforded is not entitled to have such document set aside on the grounds that he was misled into signing a paper different from that which he intended to sign, at least in the absence of evidence that he was induced by the other party to such document into not reading it." Allen v. Mitchell (June 26, 1975), 10th Dist. No. 75AP-65, 1975 Ohio App.