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CONTRACTS: Read, Then Sign

Has anyone ever pushed a piece of paper in front of you, pointed at the signature line on the last page, and hastened you to sign it? "It's our standard agreement, everyone signs it," they said. You think to yourself, "Maybe I should read this... but it's 8 pages long ... nahhhhh, I'll just sign." And you do the unthinkable: you sign it without reading it. Guess what? You're the majority. Not reading through a long, arduous contract is something almost everyone does. Who has time to read the fine print and all those pages? Well, lawyers do, but if you don't plan on hiring an attorney, below are some tips to help you navigate through unknown territory.  

What to Look For

Often times, companies present "standard contracts" or "standard agreements" that do not protect you and only protect the people who have created the contract. These agreements have certain clauses that are very advantageous for the creator and that is why you are rushed to sign it! They are hoping that you, like many others, will sign without reading. Once you sign, you are bound to the contract terms. Here are some common but deceitful clauses you should be on the lookout for:

1.       Integration Clause

This clause declares that the contract is a "complete and final agreement" between the parties. The purpose of an integration clause is to prevent the parties of a contract from later claiming that the contract does not reflect their entire understanding. In other words, all verbal or written agreements discussed and made prior to the contract are disregarded. If your verbal conversation does not coincide with the terms of the contract, the contract terms govern.


2.       Application of Law

A clause can change which laws apply! For instance, the contract can contain a clause that can force you to litigate your case outside of the state where you live and/or where the incident occurred. This is advantageous to the company because it likely to discourage many people from filing suit, even if they have a legitimate case. Think about it...you are essentially forced to hire an out of state attorney and fly out for your jury trial where you will have to pay for an exorbitant amount of transportation and room and board costs.  


3.       Assignment Clause

An assignment clause sets forth whether or not you will be allowed to transfer your rights or obligations under a contract to a third party. For example, if you sign a real estate lease for your business, the lease will typically say that it is not assignable. Therefore, you would not have the right to transfer the lease to another business and exonerate yourself of the obligation to complete the lease.


4.       Arbitration

You may sign away your right to sue in court if the contract contains an "arbitration clause," which forces you to seek arbitration with the company's routine arbitrator instead of having a jury trial. These companies are often return clients for these arbitrators and thus the arbitrator may not be able to achieve the necessary level of neutrality that is required during this process. 

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