Aug. 18, 2006 -- You don't actually read all that legalese-gobbledygook-mumbo-jumbo-teeny-tiny-premature-use-of-reading-glasses fine print, do you?
Most people don't, and that's a big mistake. In my job as a consumer correspondent, I have to. Ugh. I don't enjoy reading contracts, but it's very enlightening. You would not believe the self-serving clauses contained in the fine print of companies' contracts.
So many consumers call me and insist they've been ripped off. But then I read their contracts and learn the company did nothing wrong because the consumers signed away their rights. Keep in mind, not all contracts have the word "Contract" helpfully typed across the top. Receipts, sales slips, tickets, guarantees --even parking valet stubs -- can all serve as contracts.
When I bought my home, the closing took three times as long as the settlement attorney expected, because I actually read that pile of paperwork they shove under your nose. And the "contract" turned out to be more than just an academic exercise. I discovered the mortgage company and the title company had both overcharged me. I demanded an adjustment and got more than $600 back.
Read the Contract Ahead of Time
Here's what I suggest. Whenever you're making a major purchase, insist on seeing the contract well in advance of when you need to sign. Don't rely on the salesperson's summary of what the contract means. If possible, take a copy away from the business so you won't have to read it under the sharklike gaze of the manager. Take a coffee or lunch break and bring the contract with you. Better yet, take it home overnight.
Once you've got some privacy, you should not only read the entire contract but make sure you understand it. If you have trouble with the legal mumbo jumbo, get a friend to help. Maybe you know somebody who's knowledgeable about cars, diamonds, time shares or whatever. Maybe there's a lawyer in the family. A government bureaucrat who constantly has to read codes, rules and laws, once taught me a neat trick that works for contracts too. Make a copy and underline only the important words. Leave out all the extraneous stuff the lawyers always add in. Suddenly the mysterious meaning begins to come into focus. Here's an example from a law about towing. Read the entire paragraph, and then read only the underlined words:
"Whenever any motor vehicle, trailer or semi trailer is found on the public streets or public grounds, unattended by the owner or operator and constitutes a hazard to traffic or is parked in such a manner as to be in violation of law, or whenever any motor vehicle, trailer or semi-trailer is left unattended for more than ten days upon any public property or privately owned property other than the property of the owner of said motor vehicle, trailer or semi-trailer, any such motor vehicle, trailer or semi-trailer may be removed for safekeeping by or under the direction of a police officer to a storage garage or area."
Better? In addition to understanding the prewritten language of your contract, study it to make sure the terms you and the seller agreed upon are included. Never sign a contract that contains blanks. Cross them out before you sign. If there are any clauses that you don't like, ask the company to delete them.
Don't Eliminate Your Right to Sue
Arbitration clauses are one thing you may want to try to strike from some contracts you sign. On the up side, arbitration can get your problem resolved without expensive legal costs. If it's done by a reputable, unbiased arbitrator, it can be a blessing. On the downside, legally binding arbitration denies you the right to sue the company in court.
Consumer lawyers warn that many people come to them after suffering some terrible fraud or injury, and there's nothing they can do to help. Forward-thinking companies make their arbitration clauses obvious and give you a chance to opt out if you like. Other companies bury them. It's up to you to find the clause, read it, and decide whether you can live with it.
Verbal promises are not enough. If you want a clause added or deleted for your protection, write it in or ask for an addendum and get a company representative to sign or initial it. If a low-level employee says she can't do that, ask for a manager. If the manager refuses, come up with a compromise or consider taking your business elsewhere.
I once ordered a teal-colored leather chair. The contract stated that if I wanted to return it, I'd owe a 50 percent restocking fee. I didn't think that was fair. I was concerned that the color wouldn't be true to the tiny swatch I'd seen in the store. Teal was risky enough, but what if I ended up with turquoise? So I asked the manager to cross out the restocking clause. She said she couldn't do that because of company policy, but she gave me a great alternative. She added an approval clause.
The furniture factory set aside the actual leather for my chair and sent the store a large piece of it. Once I approved the color, the purchase went forward. Reasonable contract, fabulous chair!
You should know that, normally, contracts cannot be canceled. The buyer and the seller are the two parties to the contract and each is bound to uphold the terms of the deal. Neither one can break the contract without the permission of the other. This means if you change your mind, the seller can legally refuse to let you out of the contract. Your signature on a contract indicates that you have read and understood it -- even if you haven't.
Here's an offbeat tip: Make your signature big when you sign a contract. I've seen crooks cut nice neat signatures off the bottom of paperwork and paste them onto less favorable contracts. Scrawl your name large enough that it overlaps the lines above it, so it's hard for the company to cut and paste. And never, ever leave the business without a signed copy of your contract in hand.