Finances & Debt

When Is Fine Print a Must-Read?

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When reviewing contracts or purchase agreements, whether it’s large (buying a home) or small (ordering shoes online), it’s tempting to skip the fine print. Should you really take the time to read it? If you don’t, are you still responsible for the terms you agreed to?

Behind the scenes of fine print

Most consumers consider fine print to be legalese (disclosures, disclaimers, copyrights, etc.) that companies put at the very bottom of their offer — or buried deep within their website — to protect their interests. However, the Federal Trade Commission describes fine print as wording that usually contains the terms and conditions of a deal – the important things you need to know about. The law requires “clear and conspicuous” disclosures — which means that the important terms of the deal can’t be hidden in tiny type.

To read or not to read

Cheryl Toman is an ARAG® Network Attorney practicing in Colorado whose legal services include reviewing and drafting estate planning documents, agreements, leases and real estate contracts. She says, “From online terms of agreements to TV ads, to a waiver of liability or a cell phone contract, there are differences in the types of contracts I am asked to review.”

“For example,” she points out, “with a mortgage closing document or a car loan, the terms you sign off on can readily be enforced by the other party, who could contend that you should have reviewed it. Yet other agreements may not hold you to the same liability.”

Toman adds, “With certain types of contracts, such as a waiver of liability for a water park or an ‘agree to terms’ statement on a website, if you don’t sign it, you don’t get the service. These are widely regarded as ‘contracts of adhesion’ and are generally construed against the party offering the contract. While it could be argued that by signing off on the agreement you would know the risks, the offering party is kind of forcing you to accept the terms, so I think they would have a harder time enforcing the liability.”

There are times when you should really pay close attention to the fine print and understand it before you sign off, like at a mortgage closing or buying a car. Toman states, “I review a lot of real estate documents for my clients and I make the other party go through it with me, give me the highlights and, most important, give me and my client enough time to review.” Toman often recommends changes to the documents she reviews. Once the other party agrees to the revisions, the document is no longer considered a contract of adhesion because her client had input into its content.

If things go wrong

Once you’ve signed off on an agreement or contact, the terms are generally considered to be binding. But there are some circumstances where the contract could be voided. For example, if the contract:

  • Was entered into by one of the parties who was not of age.
  • Includes an unlawful act or object.
  • Involves a party who uses coercion, or the threat of coercion, to make the other party enter into the contract.

To help you more fully understand the fine print you’re agreeing to, Toman offers some simple steps you can take to protect yourself:

  • When closing on a home, ask to receive the documents a few days prior to the appointment so you have enough time to review them and ask questions.
  • One of the best uses of an attorney’s services and expertise is to have them review all the documents when making a major purchase. They can help you look for any hidden costs, confusing terms or promissory language.
  • Before buying a car, review your state’s lemon laws, as they can greatly differ. Also, get the car checked out by a trusted mechanic. Toman says, “I’ve worked with a lot of people who bought the car ‘as is’ and when it broke down shortly after buying it, they were stuck with it.”

Ultimately, if you take the “caveat emptor” (let the buyer aware) approach and take your time before the purchasing plunge, it can head off some uncomfortable disagreements and potential legal situations.

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