Contracts: Read The Fine Print

She’s clearly not bothered by the potential side effects, so both you and her tune out as the voice-over casually list them off: hallucinations, nausea, stomach pain, low fever, loss of appetite, jaundice, muscle stiffness, confusion, fast or uneven heartbeat, and fainting. Huh? All this to avoid a runny nose?

It’s not just pharmaceuticals that have some scary fine print, however; it is customary for businesses to include clauses that waive them from liability or put terms and conditions on contracts that are less favourable than the consumer usually realizes. When’s the last time you really read through and truly agreed to all the print on your contracted purchase or service? It’s most likely that you’re like the majority of consumers who too often glance over the fine print, confident that the worst case scenario wording won’t apply to you.

Just this week the U.K. communications regulator, Ofcom, threatened fines against mobile phone operators for misleading sales practices surrounding “cashback” promises that don’t always deliver and for “slamming”, where salepeople cold-call with the promise of a free phone upgrade or discounts but neglect to mention that this locks the consumer into expensive long-term contracts. Both practices rely on fine print that consumers may not necessarily see or fully agree to.

In Bermuda, where everything must be shipped in, homeowners oftentimes rely on items to arrive in time for a contractor who is booked for installation, but the store points out in fine print that they have only given an estimated time of arrival that they are not liable for meeting. Similarly, vehicle owners may sign a parts order form that the retailer is not responsible for any shipping delays outside their control. If you fail to pay many bills they may be turned over to a debt collection agency and you may be liable for the bill plus the agency’s fees. Or, a hotel overseas may be listed at a discount price until you add on resort fees, housekeeping charges, internet access, pool, gym and safe fees.

Banks have really been under attack for their fine print. The bank may reserve the right to raise the interest rate under certain conditions for loans and credit cards, substantially adding to your costs. No matter the business, you should be weary of “teaser” rates, which give you an introductory interest rate or promotional price for the short-term but which incur normal rates after a certain period of time. Similarly, for bills that allow for a minimum payment, beware of balloon payments that you will pay at a specified time down the road.

Use these tips to protect yourself when dealing with contracts:
• Ask for the proposed contract to take home and read, carefully checking all the terms and conditions. Ask questions until you are clear on all points. Depending on the contract consultation with a lawyer is always advisable.
• Never accept spoken promises; get everything in writing.
• Keep a copy of all contracts, warranties and receipts in a file.
• Assume that the worst case scenario will happen and ensure that you’re adequately covered or not extensively penalized.
• If you do not agree with all the terms and conditions, negotiate those points so that both parties have a fair and equitable agreement.

So, while a business’s waiver for liability against “death or dismemberment” may give you pause for thought before your next bungee jump, consider the fine print on all your bills and contracts to avoid losing an arm and leg financially.