Has anyone ever slipped you a piece of paper, pointed to an X or dotted line, and then you scribble your signature without even thinking about it? Without even reading what you've signed? Don't worry, you're not alone. A lot of us have done it, but it's not a good thing to do.
Contracts and agreements are everywhere, and we make them everyday, sometimes several times a day. Of course, cars and houses may be the first things to come to mind when you think of contracts. That's because there areusually dozens of papers to sign when buying and selling them.
The fact is, there are all sorts of contracts and agreements, some of them we make everyday, and more than once per day. Signing a receipt after using yourcredit or debit card is a good example. The bank agrees to pay the seller, and you agree to repay the bank, the amount shown on the receipt. Even aticket to your favorite concert or sporting event is a contract.
No matter the deal involved, most contracts include information or clauses that should be read and understood before you sign.
What to Look For
As a general rule, it's a good idea to read over any contract or agreement word-for-word. It's not fun, and it's not always easy, either, because of the small print, long sentences, and legal jargon. So, if you don't understand something, talk to an attorney about it before you sign it. Here are some things to look out for in various kinds of contracts and agreements:
- Integration (or Entire Agreement) Clause. You'll find this in many contracts. Basically, it meansthe contract is the complete agreement between you and the other person. What you sign is what you get, regardless off what you talked about before signing the contracts.
So, for example, say during negotiations for a cell phone contract the sale person tells you he'll give 200 fee minutes, but there's nothing in the contract saying that. An integration clause in the contract makes that promise disappear and you lose the 200 minutes.
- Liability Limitation or Waiver. This may work a couple of ways. For one, it may protect eithera seller or a buyer if he breaks or breaches the contract. The clause may specify a dollar amount the person owes the other if the contract isn't honored.
It may also mean thelimitation or complete waiver of any liability if someone is hurt by the product or service covered by the contract.
- Arbitration Clause. Generally, this means that if you and the other side have a disagreement about the contract, you both have to let a neutral third party - an arbitrator - try to settle matter before you may file a lawsuit.
- Force Majeure Clause. This is common in business contracts. It protects both sides from having to pay damages if either is unable to complete the contract because of an act of nature. For instance, if you agree to ship fresh produce to a buyer in another state but an earthquake makes the roads impassable, the buyer can't hold you liable for damages for not delivering the produce.
- Assignment Clause. This is common in many contracts, such as leases, loans, and business contracts. The clause either bars (or lets) either side of the contractfrom transferring the contract to someone else.
There are other things to pay attention to when signing or agreeing to something:
- Make sure your sales receipt is accurate - don't agree to overpay for what you bought or pay for something you didn't ask for
- Check the details in your consumer contracts, such as whenbuying a cell phone and service; renting a carpet cleaner; buying a car warranty; or any number of transactions we do. Know how long the contract is good for; what happens if you return the item or cancel the contract early; what, if anything, you have to do to activate the contract, etc.
- Read those credit card agreements. They're loaded with information about when, how much, and how often you may charged fees. It's good information to know before you use the card
We could go on butthe take away is this: Read before you sign. There's a reason for each clause or piece of information on the paper. It's best to know what they mean before you sign it and get surprised later!
Questions for Your Attorney
- Are oral or verbal contracts and agreements legal?
- What's the first thing I should if someone doesn't live up to an agreement we made?
- How old does someone have to be before he can make a contract?