Why You Need to Read the Fine Print on Contracts
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It can often be tempting to skim over the fine print within a contract and sign it without fully understanding what it is you’ve agreed to. Obligations and conditions can be so deeply buried in jargon and fine print that it can be difficult to understand the terms, even on something as simple as your cell phone contract, but it is vital that you do. The following tips can make life easier during your next contract review and will ensure that you know exactly what you’re signed up for.
Before any part of the contract is so much as marked with ink, the absolute first step to take should be to negotiate the terms of each agreement, whether or not these appear favorable upon first glance. This helps you hit the ground running and will give you firm footing in the long run. Don’t be afraid to detail your wants and needs to the other party – they want to see the deal in action as much as you do, so leave no stone unturned in discussing and negotiating terms together.
Determine risk allocation
In drawing up a contract, it’s usually agreed that any potential risks are to be tolerated by the party which can better bridle it – in other words, whichever party has the power to better prevent loss. If this has fallen to you within a contract, you should be able to review this decision based on your circumstances. If the insurance requirements for bearing such risks fall out of your budget for example, there may be cause to negotiate and allocate risk elsewhere.
Review your rights and responsibilities
The mention of rights and responsibilities can be dotted about so frequently in a contract that they can come to lose meaning upon first glance. But these are never to be glossed over. Being absolutely and clearly assured of what your rights and responsibilities are in a contract will greatly benefit you in the long run and may possibly offer up some leverage in the event of unforeseen circumstances.
Likewise, be sure that you are wise to the rights and responsibilities of your other party. Making note of important dates and deadlines on their part will ensure that you are organized and prepared for every eventuality.
Discuss termination causes
An aspect too often overlooked in signing a contract is the issue of termination. Before anything is signed, there should be a thorough discussion concerning possible causes for terminating the deal. If it transpires that the contract is not working in your or the other party’s best interests, you need to make sure that there are a number of ways you can opt out of the deal and terminate the contract at any time. This can give you peace of mind in knowing that you have an escape route if another party fails to comply.
Fill in the blanks
Search the contract for any and all blank spaces with a fine tooth comb. Unless clearly stated, each and every space on a pre-printed contract should have your stamp on it, because if these are left blank, they may be claimed by another party. Ensure that all spaces are filled and that any amendments or deletions on your part are very clearly marked. As long as these are acknowledged by you, another party cannot later join the dots and dictate their own clauses.
Hopefully, the above tips can be used to your advantage upon entering into a contract. As long as time is taken to carefully review all terms and conditions within a contract, you can feel confident about your decision and feel strongly connected toward your new undertaking.
Photo courtesy of: stevepb
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