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Read the Fine Print

It can save you time, money, and grief!

An average consumer encounters written contracts on a regular basis. Transactions over the internet typically require you to read and agree to the terms and conditions that govern the access to data being granted or to confirm that you are waiving certain rights to privacy. Every cell phone company and fitness facility requires their customers to sign lengthy written agreements that set forth the rules that govern the new relationship. Although laws have been passed to ensure that the font used in such agreements meets a minimum size requirement (so we can actually read it without a magnifying glass), the language is still often convoluted and so plagued by legal jargon that it can be difficult to determine what you agreed to do.

Now that the holiday and year-end dust has settled, you may find yourself surrounded by new gym membership contracts, warranty agreements for new appliances, extended repair agreements for new electronic gadgets, or subscription agreements for new service and delivery orders.

If you do, be sure to read the fine print in those contracts. In fact, you should closely read any contract before signing it. By taking the time to read at least the key terms and conditions, you can save yourself a great deal of time, money, and grief in the future. Key terms to look for include:

 

Promises: Often the devil is in the details—your rights and remedies will turn on exactly what words are used. It is easy to skim and take away what you believe is the reasonable interpretation and intent; however, the true meaning and effect of the sentence may be something very different. To ensure you fully understand what the deal is, carefully read the sentences that describe what the company promises to do or give you as well as any exclusions and expiration dates.

 

Notice Requirements: If you need to invoke a warranty or repair promise or demand that the company comply with their obligations, you usually need to make the request in a particular way and send it to a specific address. Similarly, if you decide you want to cancel a membership or service, you usually must provide advance notice of your intent and send the cancellation notice in a particular format to a specific address. While companies must be reasonable in enforcing these notice requirements, it will save you a lot of time, energy, and frustration if you understand the requirements and comply with them the first time around. Understanding your notice requirements will also help you avoid paying for more services or fees than you need to. I am sure I am not the only person who has had to pay for an extra month of membership because I failed to cancel before the beginning of a billing cycle.

 

Dispute Resolution: Most contracts contain language that sets a procedure and deadline for resolving disputes. Some require a face-to-face meeting or mediation before you can file a claim in court. And, some contracts indicate parties must arbitrate rather than go to court.

 

Reasonable Conclusions

Hopefully, being more aware of your rights and obligations, you will be able to quickly sort out any issues with the company. But if your talks break down, there are many organizations, governmental agencies, legal concepts, and laws that protect consumers against unfair and deceptive business practices. You can file a complaint with the local Better Business Bureau, a state or local government consumer protection unit, or a court of appropriate jurisdiction. Most states have consumer protection statutes such as “lemon” laws that impose legal obligations on the manufacturers and, in some cases, sellers of vehicles, and “unfair trade practices acts” applicable to most companies that engage in commerce. These laws allow consumers to collect punitive damages and attorneys’ fees if they prove that a company violated their legal obligations. In Alaska, we also have a common law concept known as the “implied covenant of good faith and fair dealing” that is inherent in every contractual relationship and provides the same type of recovery. Whether or not a company has violated this implied covenant is judged on a “reasonable person” basis. That is, would a reasonable person conclude that the company did not act in good faith or deal fairly with the consumer?

Again, many disputes can be avoided if both sides enter into a transaction with the same expectations and a clear understanding of the key terms of the deal. Thus, while it certainly won’t be the most fun thing you do, reading those consumer contracts will be a good use of your time.

Renea I. Saade is a Partner with law firm Stoel Rives LLP. She assists companies with their contract disputes and employment law needs. She may be reached at risaade@stoel.com or 907-277-1900. Please note this article is provided for educational purposes and does not constitute legal advice.

This first appeared in the February 2014 print edition of Alaska Business Monthly magazine.

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