Do Not Sign a Contract Until You Know What It Says

You know what a contract is.

It is that stack of paperwork you have to sign when you buy a home or a car.  It is that lengthy small-print, double sided piece of paper the cellular phone company makes you sign before you can buy or upgrade your phone.

Did you also know that the credit card receipt you sign at the gas station and the marriage you entered into with your spouse are contracts as well? Did you know that the fancy engagement ring you gave to or received from your fiancé is a conditional contract?

I do not mean to single out cellular phone companies, but their contracts in general have the appearance of the least negotiable as far as length of service, termination provisions, and the inclusion of the small print on the back page.  I personally have attempted to negotiate the terms of a cellular phone contract for the fun of it.  

I once went to the local , looked at the phones, and then asked to see the contract.  The young man who was trying to earn a commission seemed immediately on the defensive. I then proceeded to ask questions. I asked why I was required to pay every month even when the company was not required to provide continuous service.  I asked why the Forum Selection Clause required me to litigate any dispute I had in California and I could not have a jury decide the case.  

I continued painstakingly reading every last sentence of the contract and asking questions that I knew the answers to but a non-lawyer would not.

Understandably, the young man was not in a position to negotiate the contract terms and he certainly did not understand them. Shockingly, however, he would not let me take the contract with me to have it reviewed by an attorney. He stated the contract was somehow “proprietary” and a trade-secret. Even after I explained that millions of people read this contract, and I would get a copy after I signed it, I was not allowed to take the contract with me.  

I politely said that I would take my business elsewhere and then told the young man that I was actually there to buy six phones and two wireless cards with the latest technology. He should have let me take the contract with me. I was simply trying to protect myself.

There are few things you can do to protect yourself before entering into a contract.

1. Take time to thoroughly review and reflect on the contract. Always ask for time to review the contract. Your review of the contract should be away from the other contracting party. If you need a day for simple contracts or a week for more complex contracts, simply ask. Any party that refuses to give you time to review the contract probably knows that your close review of the contract will probably raise a red flag to you. 
2. Do not fall for the classic, “If you do not sign now, you will lose this very special deal.” If when you ask for time to review the contract, the other party says that you can have time to review the contract, but that special 10 percent off or the rebate will only last for another five minutes or one hour, put your contract red flag up. My typical response is, “If you want my business, your special deal will wait until I am done reading this contract.” Do you really think that door-to-door salesman or car dealer is not going to offer the same deal to the person he or she talks to on the next business day?
3. A contract contains its own terms and all applicable statutes and laws as well. When you sign a residential lease for example, you are also agreeing to all the terms in the residential lease statutes and related law. When you sign a mortgage, you are agreeing to all the statutes related to mortgages including statutes, rules of procedure, and the law made by judges.  When you enter into a contract as a merchant or with a merchant, you are also agreeing to be bound by Florida’s Uniform Commercial Code.   This is a highly complex statute that even most attorneys do not understand.  
4. Most contracts are written to protect the party that wrote the contract. When you sign mortgages, new car contracts, cellular phone contracts, or any standardized contract, I hope you do not really believe those contracts were intended to protect you in any significant way. Almost without exception, if it is not a contract you wrote, then it is not written to protect you.  
5. If you do not know what every provision means in the contract, please find the answer. This is the golden rule of contracts: Do not sign it until you understand it. However, do not ask the person or company that presented the contract to you for the answer.

There are many sources to help translate contract terms. Remember, any contract worth its weight is written by attorneys for attorneys and judges. The best source to understand a contract is to see a contract attorney. Some attorneys provide a free consultation to discuss the contract with you.  

There are several other sources that can lead you in the right direction in translating a contract.  If you “Google” the term “force majeure,” you will receive a decent translation. The same is true for so-called, Time is of the Essence Clauses, Non-Compete Clauses, and many other standard provisions.  

The Florida Bar, your local Bar Association, or your Clerk of Court may also provide free or low-cost access to legal information such as:

1. Free or online law resources
2. Self-help seminars
3. Low cost access to local attorneys on a “pay-by-the-minute” basis
4. Articles on your particular type of contract.  

Additionally, your employer may provide you with a legal benefits service that you may not be aware of.  One school district used to have a program where a teacher could obtain a free consultation and the first $800 in services was covered.

We cannot negotiate the terms of every contract we enter into.  Some contracts we either agree to sign or we do not agree to sign. However, if you do not know what you are signing, you lose any power you have as a consumer.  

So as not to leave my story untold, I have a friend who also is in cellular sales and knows I am an attorney. He let me review his contract for five days and we negotiated some of its terms. My ability to write this article with my wireless card in the airport by its due date while checking my messages on my phone is still safe - because I reviewed the contract.