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Educational Consumer Tips

Read Before You Sign

Author: Rachel Willard
Published:
Category: Education

Your Signature Binds You to a Contract

After you sign a contract, if you don't keep your agreement, the other party to the contract may take action against you. You have the right to cancel if you can prove the contract is illegal or was induced by misrepresentation or fraud.

Generally, if you break your contract without permission, you probably forfeit your right to your deposit.

You can free yourself of obligation neither by notice of cancellation unless it is accepted by the other party, nor by refusal or return of the goods. Repossession does not relieve you of any remaining obligation.

Nothing is "free" when in your contract you agree to pay for it.

Don't sign unless you can and intend to do what you agree to do.

Don't sign because of any verbal promise that the contract can be canceled later.

Your complaint against the seller does not relieve you of your obligation to pay the finance company or bank - unless the law in your area provides otherwise.

The law permits notice of cancellation of certain types of contracts at a certain time and according to certain procedures. Examine your contract for any provisions regarding cancellation. This is particularly important when the contract was signed in your home or at some place other than the normal place of business of the seller.

Finance charges must be expressed in dollars and cents and also as an annual percentage rate.

Read Every Sales Agreement Before You Sign It

You can save yourself from paying for things you do not receive by reading every sales, service, or work agreement before you sign it. Every such paper you sign is probably a contract. It usually binds both you and the seller to do certain things. Contracts can be long or short, but they don't have to look legal to be binding. Because most contracts are written to protect the seller, watch to see that the contract also protects you.

You and the seller are not bound by anything that is not in the contract, but you, the seller or both, are bound by everything that is written in the contract. Be sure that the contract tells what the seller will do for you, as well as what you are to do. Generally, verbal representations do not count legally, once you sign a contract unless they are in the contract. If they are important, have them written in the contract.

If Something in the Contract Does Not Apply to You

If a clause in the contract is not what you bargained for, cross it out. If the seller will not accept it that way you don't have to sign. Sometimes a salesperson will tell you "That's only there for special conditions," or "Pay no attention to that because we never enforce it," or "This clause doesn't apply to you." Don't accept this. The paper you sign is what counts.

Of course, there are some terms and conditions which must be part of a legal contract.

 

Never Sign a Blank Contract

Never sign a contract where the work to be done or the merchandise to be purchased or the price and terms of the product or service are blank and will be filled in later. It's like signing a blank check. Wait until everything you want is specified in the contract before you sign it. Once you attach your signature, it is difficult to prove later that the paper was blank when signed. The laws of some states require that conditional sales contracts and certain other types of contracts be filled in complet ely when signed, and, in many states, that you be given a copy of it when you sign it. Whether required by law or not, you are entitled to a copy of any contract or agreement you sign.

 

Helpful Hints

  1. Contracts with tricky terms are used by tricky concerns. Be sure that any writing in the contract is clearly understood and legible.
  2. In those contracts where the law allows cancellation in writing within a prescribed time, the BBB recommends this notice be sent certified mail, return receipt requested, or by telegram.
  3. Many contracts carry provisions, often in small type, which read to the effect that no representations other than those contained in the contract itself are recognized.
  4. The term "guaranteed" when used alone, means little and is ambiguous. Guarantees, unless specific, may be worthless.
  5. In connection with home improvement and remodeling contracts, don't sign completion slips before the work is finished satisfactorily.
  6. An installment sales contract should contain an itemized listing of all charges, and you should get a copy at the time of signing.

Watch For These Things in Every Contract

  1. Be sure the contract covers everything you want, and is priced, as agreed.
  2. Be sure the contract covers all extra work and is properly priced, is specific, and is all that the salesperson promised.
  3. Be sure you are not agreeing to pay for anything you do not want.
  4. Read every line before you sign. Be sure to read the fine print. Be sure it does not take away rights you thought were yours.
  5. Deal only with a reputable concern.

About the Author: Rachel Willard is Communications, Marketing Specialist & Webmaster for BBB serving Eastern Massachusetts, Maine, Rhode Island and Vermont. Find Rachel on Google +.

Questions and Comments

Question Submitted 4/9/2013

I have a signed contract btwn my roofing co. and client. The client is no longer returning my calls although no issues have been brought to my attention. The contract was signed about a month ago, no other company has done the work do I have any legal recourse to recover a portion of the money, you see I have taken out loans based on the contract.

BBB's Answer:

I would file a complaint on bbb.org as well as your Attorney General's Office and licensing agency in your area to see if you can get the funds returned.

Question Submitted 5/21/2013

I am having a shower installed. A plumber was required to complete some work. The plumber installed some type of pipe, was here at my home for a few then left. I was not give a price, it was just done. I later got a bill for $575 which seems outrageous and was not give notice of the price and the charge. What should I do

BBB's Answer:

I would suggest asking for a detailed breakdown on the cost including parts and labor. 

Question Submitted 6/25/2013

Are service contractors required to provide a breakdown showing parts and labor charges separately? I'm using a service contractor that says he doesn't show parts and labor; just a single price he gets from some big book he has. I like to know what I'm being charged for and feel that when things are hidden from me it's never for my good.

BBB's Answer:

I am not sure if that is required by law or not. You could ask your state Attorney General's office. 

Comment Submitted 6/27/2013

I was in the market for a specific RV and found the vehicle I was looking for out of state. I left a deposit to hold the vehicle and was told it was fully refundable until I actually signed the contract. The dealership emailed the contract to me the following day. In the interim, I had a change in my job situation and decided it was not a good time to purchase the vehicle. I had not signed the contact but was scheduled to pick up the vehicle that week. I called the dealer and explained I would be unable to go through with the purchase. He, of course, tried to get me to change my mind and when I said I was just going to be unable to purchase the RV, he asked me to send a signed letter stating that I would not be going through with the purchase. I sent that electronically and added a request that my 2000 dollar deposit be refunded. I wondered if there is anything more I should do, as he never said he would not refund the deposit but he never said he would either. He did say that they had already prepped the unit for delivery, and I offered to compensate him for this, but he said that it was not an issue.

Question Submitted 7/6/2013

Dish Network has you sign a contract before they give it to you. The technician says I will receive it by e-mail once I sign. So I signed & then after 1 1/2 days I didn't like the service for reasons that showed up on the contract like early termination fees & labeling fees to return the merchandise. None of this was mentioned when I spoke to the customer srvc rep when I applied for their service. I canceled on the 2nd day of the contract for obvious reason besides the system did not work like DISH Network said it would. Am I liablt for the fees?

BBB's Answer:

Most contracts signed are enforceable. 

Question Submitted 7/16/2013

we had a signed purchase agreement to buy 11.25 acres from a man and he also signed the agreement. then our realtor said something unknown to her was going on and our closing date kept moving further into the future to about from aug,2012 to 2013 i think in march. i can go to the file for exact dates but the "mystery" turned out to be that the seller was selling an easement on this property to a bank that owned a house down our driveway that is still empty. can he legally sell such a large piece of this prpoperty after a signed purchase agreement was complete? he sold approx. 2.5 city blocks as an "easement" for the house, still empty, to use our land as their driveway, now "roadway" in essence, and we were told nothing, but lied to by our realtor who was well aware of this "mystery" i believe that kept delaying our closing. thank you for your time.

BBB's Answer:

You will have to check with your attorney on this. 

Question Submitted 7/21/2013

I never signed a contract with Directv when switching to dvr service, they told me I was grandfathered in and when I termed my service three months later, they billed me for an early term fee claiming they did not need a signature or verbal agreement as they sent a letter I didnt receive. I told them I wouldnt pay without proof of agreement so they took $375.00 from my debit visa. I want to know without a signed contract is this leagl?

BBB's Answer:

You can check with your state Attorney General. I would ask them for a copy of the contract or the terms you agreed to. 

Question Submitted 7/24/2013

If I have lost the contract copy between me and a company, then am I legally entitled to receive a copy, before the company decides to take me to small claims court?

BBB's Answer:

I would contact your state attorney general's office with this question and ask for guidance and assistance from that office. 

Question Submitted 7/26/2013

I have an agreement with a roofing contractor that I signed. It currently only has my name, contact information and my signature (No description of work or price). I was under the impression when I signed that it was to allow this contractor to look for damage on my roof. Things went south with this contractor when I asked for a quote and product details prior to getting the insurance check endorsed by my mortgage company. They refused and I started looking for a new contractor. They are now asking for 30% of my insurance check (per the agreement, because I do not want to give them the job). Is this a binding agreement with this contract since there is no description of work or price on the contract?

BBB's Answer:

I would contact your state attorney general's office with this question and ask for guidance and assistance from that office. 

Comment Submitted 9/16/2013

I live in a subdivision of 7 acreages in Iowa. We share a common private road. Some of the owners want to formalize a road maintenance agreement. If I don't sign, am I legally bound by it? If we decide a majority is 5 owners and if 5 vote in favor of something (expenditure), can I be forced to comply and pay even if I can't afford it?
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Disclaimer:
Views expressed on this page are those of the individual author and do not necessarily reflect the views of Better Business Bureau.

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