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From the UK: Do You Read Contracts or The Terms and Conditions Before Signing The Dotted Line

Terms and ConditionThere is an old sales closing line I like, “press firmly you are making three (3) copies”.

The joke of this line is that if you have a perspective buyer with pen in hand signing a contract or purchase order, you have the sale.

But how many of us read all the fine and small print when we sign any form of contract or agreement?

If you look at the terms and conditions for many agreements or contracts, they seem to go on and on. In addition, many contracts today are done via the phone or online. We switch gas and electric providers via the phone, or sign up for Internet or TV services online.

The provider may discuss some terms and conditions over the phone, or have a page online to read and then tick a box stating we agree to these terms, and they may even send us out via post a book of the T&C’s, but do any of us really read it.

Do we really know what we have agreed to?

According to one survey, only 7% of us actually take the time to read the “full terms and conditions” when signing up for a service or making a purchase.

In addition, 20% of those surveyed stated they “suffered” from not reading the terms.

The survey was commissioned by Skandia, which is an investment firm.

Many contracts and their terms and conditions are daunting just in how small the print is and how much there is to read.

A Senior Lawyer, at Which? Legal Service, Joanne Lezemore said, : “The advice is simple: always read the terms and conditions of any contract before you sign it.”

“It is really important you understand everything before you sign on the dotted line, as you could find yourself landed with extra fees or charges. While all consumer contracts are subject to the unfair terms in consumer contract regulations, this doesn’t mean you can challenge a clause just because you didn’t know it was there, or you think it’s unfair – because it’s clearly written, you’re bound by it.”

She added, “They are different on every website, so make sure you know what you’re agreeing to. People are often surprised to find out they’re obliged to pay to return unwanted items purchased online, as it is commonly stated in the terms and conditions – and these fees can be expensive.”

So we can gather on average, none of us is reading the small print, and it can cost us in the end. As to if these terms and conditions are enforceable, they can be.

And the terms can also be very vague and cover everything in just one line.

For Apple’s iTunes, their terms has this statement, “Apple reserves the right at any time to modify this agreement and to impose new or additional terms.”

And it is not just Apple that uses this “catch-all” term. What this statement means is that Apple, or whatever company includes this or a similar statement in their T&C’s, is that they can make any changes they wish at any time, and you are bound by those changes.

The company may send you a notification about the change, and you do have the choice of not accepting it and losing or quitting the service, but they can still make the changes.

According to Jimm Stout, of “Terms of Service; Didn’t Read” or ToS;DR, “We see it in Microsoft, Netflix, Apple.”

“They don’t have to tell you, they may tell you but they may not. Just continuing to use the service is complying with that contract.”

So how enforceable are these terms that a company may have changed without notifying us the consumer?

Regarding enforceability as per Professor Julia Hoernie, who is an Internet law specialist, “It isn’t possible as such, not under European law.”

Terms and Condition“The first point is that in a long-term relationship such as a social network, the service provider has to be able to, at some stage, change terms as they engage in technical innovation, they offer new services, they want to collect different data or the prices change.”

“There has to be some mechanism whereby they can change the terms.”

“But it’s quite clear they have to give notice to the consumer and give the consumer a choice to cancel the contract because they don’t find these terms acceptable any more.”

So the question becomes, if enforcement is illegal under EU law, why do companies still use these terms and conditions and make them as complicated as they are?

Professor Hoernie adds, “Customers don’t read the terms of service so [companies] get away with it.”
“The consumer might win but the consumer has the heavy burden of taking the cost of litigation. It takes a brave person to take on a service company on the internet.”

It is a lot to read through on many of these T&C’s, in addition to just being able to understand them.

Paypal’s terms of agreement is 50,000 words, and Apple’s iTunes is 14,500.

Mr. Stout from ToS;DR adds, “If you were to read all the policies that you agreed to online, you would have to take 76 work days just to finish reading through the policies you agreed to.”

Mobile Contracts T&C’s and Increasing Monthly Fees

Just recently EE and O2 mobile phone customers were informed that their monthly contract tariffs were going to rise by about 1.3%.

As a monthly contract customer you may ask yourself how can they make this increase as I am locked into a monthly payment by the contract.

How the mobile carriers can make this increase is that in their terms and conditions it states if inflation goes up, they are allowed to make the increase to keep up with inflation. There are caps as to how much they can increase the monthly bills, but the fact is they can increase the charges.

You can cancel the contract if you wish under some circumstances without paying a penalty, but it can be difficult. It depends on when you took the contract out, if you were informed of the increase, and also if the increase is more than what is allowed.

Again, just another condition that we may not have been aware of when taking out the contract, and it may not have stopped us anyway.

Reading The Small Print When Buying a Property

Buying a property is many people’s dream, and it can be a difficult one to achieve as property prices seem to be on the rise, and just finding a property in the area you wish to live a challenge.

In some areas you may be buying a property, but not own the land, there is a lease on the land, which has to be renewed over time. That is why you need to read the “fine print” when looking to purchase a property.

While renewing a lease may not seem like a big deal, it can be expensive, so that makes it a big ££ deal.

This may cause a buyer to seek out another property, one without a lease, or one that does not have to be renewed for a very long time.

It also begs the question for a first time buyer, do mortgage companies take the lease into consideration when underwriting a mortgage.

According to David Hollingworth with London and Country, a mortgage lender, “It’s property specific rather than applicant specific.”

“The type of buyer you are shouldn’t have an effect. The lender wants a property to provide adequate security for the mortgage.”

“In the case of 83 years, that’s not likely to pose a problem right now.”

He added, “Halifax requires a minimum of 70 years remaining on the lease at the beginning of the mortgage. Santander has a minimum requirement of 55 years and at least 30 years at the end of the mortgage term.”

“There are others that can require longer though.”

“For example Post Office requires a minimum lease remaining at 85 years, so there will be lenders that would struggle with your initial example. But it shouldn’t make the property unmortgageable.”

Changing an Agreement

In the majority of instances it is not going to be possible for us as consumers to make changes or not agree to some parts of a company’s or web site’s terms and conditions. Once a company has set-out what those terms are, it is usually for a reason, one reason is to protect them and in some instances can give them an unfair advantage over us the consumer.

It isn’t bullying, but it may feel somewhat like it.

If you wish to make a change or not agree to the T&C’s, you may be told fine, then you do not receive the service or product. The company takes their ball to play elsewhere.

This is not to say you cannot negotiate in some instances, however, you need to be able to speak to the right person in authority who can make the changes and adjustments.

One example is a private landlord.

They may have you sign a tenancy agreement which outlines your usage of the property, and what both parties can and cannot do, in addition to the rent amount and when it is due.

Since you may be able to speak to the property owner/landlord directly, it may be possible to request some changes if need be.

Recently I read where a tenant had been sent their tenancy agreement to sign and it was in a word processing format that could be manipulated, it was not a locked pdf or other type of locked file.

So the new to be tenant made a small change to the agreement.

The change was:

A great joke on the landlord, and one has to wonder if the landlord actually read the agreement through when they got it back?

Tenancy Lease Clause if Bankrupt

If someone is struggling with their bills and debts it can be a very stressful time. Going bankrupt can relieve the financial tension, however no one wants to then worry abut losing the place they live in.

There can be issues for someone in a rented property if they were to go bankrupt or enter into an IVA/Individual Voluntary Agreement.

When a person goes bankrupt, the Official Receiver does not as a matter of course notify someone’s landlord, but the OR is going to want to know if you have any interest in the property as it could be an asset.

By showing the OR a tenancy agreement, there is no need for the OR to contact a landlord. If yo have no tenancy agreement, then the OR may wish to contact the landlord to confirm you are a tenant, and have no interest in the property.

Does contacting the landlord become an issue for the tenant, only if the tenancy agreement has a clause that states an non-discharged bankrupt cannot reside there.

The only reason for this clause is due to the fact the address would be listed and used for the bankruptcy.

So you need to know if your tenancy agreement has this clause.

You can also have a word with your landlord if this clause is in the agreement. Just because the clause is there, doesn’t necessarily mean the landlord will exercise the clause.

If you have always paid your rent on time, the landlord may be sympathetic to your circumstance.

So while we know that taking the time to fully read any contracts we sign, and reading the terms and conditions of any agreements is important, I don’t believe we are going to change our ways and suddenly take the time required to do so. However, maybe we will at least look them over a bit prior to signing.

,There is an old sales closing line I like, “press firmly you are making three (3) copies”. The joke of this line is that if you have a perspective buyer with pen in hand signing a contract or p

This article by Jon Emge was syndicated by the Personal Finance Syndication Network.

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