Written by attorney Steven Michael Fahlgren

Read Before You Sign: Important Aspects about Contracts

In the good old days, a man could be taken at is word and a handshake could seal a deal and thus, written contracts were often the exception rather than the rule. Today, handshake deals are the exception. Because contracts are more important than ever and often govern disputes, I wanted to provide readers with some important things to know about contract law.

One important piece of advice is that if you sign a contract, the law presumes that you read it and comprehended it. The law does not ordinarily let someone defend against enforcement of a contract on the grounds that he or she did not read it. Just as ignorance of the law is no excuse, ignorance of what was in a contract that you signed does ordinarily help your position.

The reason for this rule of law is that our economy benefits from having contracts generally enforceable according to their terms rather than requiring someone to also prove that a person understood what was signed. Without this rule of law, the certainty that comes with contracts would be lessened and litigation would be more common even if a contract was clear. Once you understand this rule of law, you understand why it is important to understand what you are signing because the law assumes that you did.

The first thing that will happen when you take this advice is someone will laugh at you for reading the contract you are asked to sign. If someone is attempting to rush you through the signing process, you should ask yourself why. A person should not discourage you from reading a contract before you sign it or cover up sections of the contract you are signing (or attempt to summarize the contract in general terms. Your reliance on a salesperson’s summarization will likely be of no help to you at a later date. If the contract language was important enough to write down, then it is important enough to read. Indeed, the federal Truth in Lending Act requires that

you be provided with certain installment contracts before you sign them so that you can shop around if you so desire (be sure you have not already signed a purchase contract if you only intend to buy only if you can obtain good financing terms).

Assuming you take this general advice and read all contracts before you sign them, there are certain clauses that I often tell consumers to strike from a contract. The first is any requirement that parties agree to binding arbitration before there is any dispute. There are many reasons for this recommendation but they will have to wait for another article on arbitration.

Second, consumers should consider striking through sentences requiring the consumer to litigate any disputes in a foreign jurisdiction or be subject to the law of another state. You can ordinarily assume that the other contracting party wants law of the other state to apply to the contract because it is less favorable to you.

Third, consumers should strike through any portion of the contract that says it automatically renews for another year if there is no cancellation within 90 days of the expiration of the contract or words to that effect. I have seen this in a lot of alarm monitoring contracts and other multi-year contracts.

Fourth, consumers should make sure the contract contains everything that was promised and all material representations. Many contracts contain warranty limitations and limitations of remedies. These contractual provisions can undermine or contradict verbal promises or representations that have been made. If there is something important that was promised, it should be included in the contract documents even if you have to handwrite it into the agreement. Don’t worry about contradicting the fine print of the contract because most courts will give greater weight to handwritten provisions if they contradict typewritten provisions.

If something was truly promised, the other party should have no objection to ensuring that it is written into the contract. I would insist that your contract contain such promises and to go elsewhere if the other party is unable to show you the specific language that tracks what was promised or is unwilling to add the language to one of the paragraphs of the contract. Most contracts contain language that say the contract is the entire agreement or there are no other agreements, so it is very difficult to suggest later on that something else was envisioned that was not in the contract. If you were promised something would be finished in two weeks and it is important, consider adding a clause that the contract price is reduced by a certain amount for each day it takes after four weeks or six weeks.

If all of this seems somewhat complicated to you, then you should have your attorney review the contract, especially if it involves a significant obligation on your part. Many will do so in as little as a half hour or hour. I intend to write my next series of articles on tips for buying cars and your rights under the Fair Credit Reporting Act. If you have an idea for a guide, please call my office at (904) 845-2255.

Disclaimer: The above Article is intended to give you, the consumer, insight into various legal topics. This information is not intended as legal advice, but rather helpful topical information.

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