Understanding Contracts

Many purchases may require you to sign a contract. Contracts are legal and binding documents that are there to protect both the buyer and the seller. A contract allows the seller to define the extent of its obligation for the delivery of a product or service, while committing the buyer to the price to be paid once specifications are met. It also provides reasonable assurance to the consumer that the product or service will be received for the price and other factors agreed upon.

Once you sign a contract, it generally cannot be changed or altered unless both parties agree.You should read and thoroughly understand a contract before you sign it. The time to change the agreement by adding or removing items that you are unwilling to agree to, is prior to signing the contract.

The Better Business Bureau offers the following tips to consider, before you sign a contract:

• Be wary of vaguely worded provisions, exclusions or limitations that could later pose a problem.
• Request that confusing or ambiguous statements be either deleted or clarified to your satisfaction.
• Don't be pressured into signing a contract before you're ready.
• Be sure you understand all the terms and conditions.
• Keep a copy of the signed contract. Your copy of the contract is the only proof you have of the conditions of the agreement.
• Make sure that all oral promises are included in the contract.
• Keep in mind that oral promises are not always legally binding.
• All parts of the contract should be completed before you sign.
• Never sign a blank contract.
• In some cases, have your contract reviewed by a legal counsel before signing.