Overfilling an automatic transmission causes the fluid to foam, leading to erratic gear shifting, oil starvation and transmission damage. Overfilling a manual transmission causes the fluid to leak from the vent and the gear trains to slow down when the clutch is depressed, leading to gear shifting problems.
When adding transmission fluid, checking the fluid level often can prevent overfilling. For most vehicles, the transmission fluid level can be checked by pulling out the dipstick while the engine is idling and the transmission is in park. The recommended level is between the "add" and "full" marks on the dipstick. The transmission fluid should be checked at least twice and the dipstick wiped between readings to ensure accuracy.