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Consumer Guide: Signing A Contract

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From 8 On Your Side of News Channel 8

Published: April 2, 2008

Most of the important decisions you make in life involve signing a contract, and contracts are legally binding. So remember to read every line before you sign.

KEEP A COPY: Always keep a copy of any contract you sign for quick reference and to make sure the contract isn't changed later after you sign it. Most reputable firms will insist you keep one.

WHAT THEY LOOK LIKE: Contracts or agreements need not be identified by a heading and the word "Contract:". They are sometimes represented as receipts, sales slips, guarantees, etc. Contracts may be oral or written. The law also recognizes "implied" contracts in certain circumstances.

CANCELLATIONS: Ordinarily a contract can't be cancelled. There are two parties to a contract...the buyer and the seller. Each has the same right to expect the other to live up to its terms. Once the contract is made and in the absence of fraud and misrepresentation, neither one can properly break, cancel or revoke the contract without the permission of the other. If the buyer "changes his mind" or because of unforeseen circumstances wants a deposit or money back, the seller LEGALLY does not have to give it to him. On the purchase of a financed automobile, however, there is a variation on your ability to get your deposit back, depending on the circumstances.

EXCEPTIONS TO THE CANCELLATION RULE: On door-to-door sales, the consumer has the right to cancel any contract consummated in the home by simply notifying the seller IN WRITING WITHIN THREE BUSINESS DAYS that he no longer wants the goods or services sold to him in this manner. Send your notices via registered mail. Home improvement contracts which are to be financed over a period of 90 days or more may be cancelled within 48 hours of execution by giving written notice of cancellation by registered mail to the other party. Federal laws permit you to cancel a credit arrangement within 3 business days if your residence is used as collateral for credit.

SIGNATURES: Your signature on a contract indicates that you have read it and understand its terms and conditions, even if you haven't read it or have only partially read it.

VERBAL REPRESENTATIONS: The written contract usually holds, unless satisfactory proof is available that you were induced to sign the contract through false or fraudulent representations, and this is always difficult to prove. For your own peace of mind request all oral representations be inserted in the contract before you sign it.

SIGNING CIRCUMSTANCES: A contract is binding even if signed on Sunday or Holiday, or if its' signed to get rid of a persistent salesman. Never sign a contract on the assumption that it will not be binding.

GUARANTEES: Some guarantees are full of loopholes through which the guarantee can be evaded. It is of extreme importance to know and understand the limitations and terms of guarantees because the word itself, when used alone, means little and is ambiguous. It doesn't have to mean satisfaction or your money back, and can sometimes actually reduce the seller's responsibility.

RETURNS AND REPOSSESSIONS: Most contracts provide that even though an article is repossessed or returned willingly, the customer is obligated for the difference between the amount obtained by the seller in the second sale and the balance due on the contract.

Provided by "8 On Your Side" with help from the Better Business Bureau.

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