No matter how many times it is repeated to us, most of us
sign our name to hundreds, if not thousands of contracts,
documents, affidavits, binders and other legally binding
contracts in our lifetime, without reading all of the
dubious "fine print" that is almost always attached.
As we all know, this common but dangerous practice can lead
us into trouble financially or legally bind us to
obligations we are unaware of if we're not cautious in at
least skimming the contents, or the "meat" of any contracts
or agreements we sign.
Often, we don't read the fine print of contracts because of
the quantity of paperwork attached or because the legal
wording is impossible to understand unless you're a lawyer.
Sometimes the content is just so voluminous that is seems
overwhelming to actually try to read all of it.
Documents of importance to comprehend fully would be, of
course, a mortgage agreement. Recently, with all the
predatory lending scandals, signed contracts for mortgages
are all that much more important to read and understand
fully before signing. Many people feel that they did not
fully "get" that they were signing for a variable rate
mortgage, nor what it could really amount to if the rates
did go up.
The end result of this is the skyrocketing foreclosure rate
on homes today. Another significant document to pay strict
attention before signing would be agreements for cell
phones. Make sure you know all of the conditions and
obligations before you sign. If anything in the wording is
unclear to you, don't be afraid to ask for an explanation.
You need to know ahead of time how long the contract is
binding for and what kind of services they have if your
phone is in need of repair, lost or damaged.
Also, if you are installing or purchasing a security system
for your home, pay strict attention to the document you're
signing.
Most security companies have a multi-year contract
obligation. Inquire about service during the contract
period and what recourse you have if your system fails or
you have no response to an alarm going off. Find out if
the monthly fee is subject to any increases during the
contract duration.
Reading insurance contracts is another confusing issue for
many of us. I think the last thing anyone would want to
read if given the choice is an insurance contract. They
are getting better as time goes on and insurance regulators
are requiring more "everyday" language in insurance
documents, but it still can be quite an undertaking to
really decipher what they say and mean. Make certain you
are clear on your options and know what is and is not
covered. Know what the deductible is in advance.
A recent example of this took place locally with severe
flooding in my area that occurred about a year ago. Most
home owners thought their insurance would cover the flood
damage, and unfortunately when there was actually a claim
to be made, found out that it did not. The explanation for
the lack of coverage was that the homes were not in a flood
plain zone.
With the utility companies all offering so many options
today, watch closely for terms and duration of the
contracts that apply. If they offer you an unusually low
price, make sure you know how long it will be at the
introductory price. Find out the maximum amount your cost
can be for the duration of the contract.
It sounds so simple to read all the fine print before
signing anything, but the fact is very few of us do take
the time and ensure we understand all the details first.
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Danna Schneider is the founder of
http://www.creditcardcatalogue.com for information on low
interest credit cards, special deals on low to no interest
credit cards, and the best deals currently going in credit
and loans. She also manages an online financial and credit
info blog http://www.primeratecredit.com .
