Episode 14

Contracts for Dummies

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I cannnot overstress the importance of reading a contract before you sign it. Read it and understand it. Promises made to you by a salesman are meaningless unless they are in the contract. Do you know when a contract is a contract? Both oral and written contracts are legally enforceable. What have you learned from your mistakes or successes? Your story could be a valuable lesson for others. Anything to share?

Your stories

  1. Thank you, Mom and Dad!

    by Susan
  2. My mother would kill me...

    by Jennifer
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  1. Thank you, Mom and Dad!

    by Susan Mom told us to make sure we read every contract carefully before signing it. Dad made sure we met a few crooks who believed the only sin was getting caught. - A salesman told me the vacuum cleaner cost $137 and I could trust him. I read the contract anyway: the price was $737. - A car dealership told me they'd return my car to me in two days, all tuned and ready to go. It almost took a lawsuit to get that car returned: I had no signed contract, and apparently the mechanics needed to put in over a thousand miles of 'test drives' during those six weeks. An independent mechanic tuned the car for me in less than a day and did a great job. - "Can I move in right away and pay in full next month?" I agreed. Bad idea. Bad roommate. - I have a simple contract when selling anything now: pay me the full amount in cash, then you can take the item off my property and that makes the sale final. No returns, no refunds, no holding an item till later.
  2. My mother would kill me...

    by Jennifer Before my mother signed anything, she would read it in its entirety, ask questions of anything she didn't understand, and get her signed copy before she left. As a little girl, I saw her be nonplussed in front of pushy car salesmen and irritated bankers as she took her time to read every word of a contract. Later she'd tell me in the conspiratorial tone that mothers get when they are about to tell their daughters something really important: "It doesn't matter what they say. Get it in writing." When someone prods me to sign something without reading it because nobody else reads it, I say "But I have to. If I don't, my mom will kill me."
  3. Dumb and Dumber

    by Daniel When I was planning a cruise last year for my Father and I, we got the contract via e-mail stating we would get our on board credit in the amount of $75 and the promise to be contacted if the rate went down. We learned that the cost of the cruise went down after booking and tried to contact the agent. The agency claimed the agent was "too busy to deal with us". It was a chutzpah that I had the cruiseline on the other line and they would not deal with the agent unless she transferred it over. I was yelling to the agent and even called her using a Judge Judy soundboard as I was so fed up with her not abiding by our contract. Guess who lost business? We are taking our buiness elsewhere which is the beauty of the internet and competition. I read and memorized the contract and man I wish I had Judge Judy over for dinner so she could give them her "I'm smarter than you are" schpiel .
  4. 'Buying' stolen goods

    by Harry I saw a car for sale in a newspaper ad. The price was reasonable and its condition good. I paid cash for it and was happy with the purchase until the Police took it away a year later. I had licensed it with the authorities with no problem but it was a stolen vehicle and you can't legally purchase a stolen car. The loss was mine!
  5. Panic Mode Contracts for Dummies

    by Rachel A local franchise of a big name plumbing company was called out to address a sewage backup on Xmas Eve. The tech was asked to be detailed on the contract-he was. He sold a $200 valued customer protection plan w/preferential service & pricing. Since the tech claimed he couldn't get the snake past a point in the sewer line (but a plumber who came at the onset of the problem 3 days earlier didn't report a similar problem), he offered to ask his "buddy" to come video inspect the line as a"courtesy"-discovered he was from the same company(bait&switch-like)."Buddy" claimed a sewer replacement was needed & wrote up the invoice not accurately describing the work or its costs or showing preferential pricing. Since everything was torn up, another contract was entered into where a toilet was to be added at no charge but the tech couldn't give membership pricing due to the"free toilet." Sewage still backed up after 20k+job. Written & verbal contract differed. Complaints ignored. Nightmare. Learned to late!
  6. Lost our house!

    by Levia My mother, brother and I signed over my house to my uncle; we had a verbal agreement. That is not a stand up contract so not only did we get evicted and me and my kids put on the street, we also lost our house because we live in one of those good ol'boy towns. I wish there could be justice but we can't find any because we didn't consult an attorney ourselves or have a contract, just a verbal agreement. Long story short: get an attorney!!!!!
  7. Contracts are meaningless

    by Barbara I recently received a judgement in my favor when a client of mine broke our contract. The problem now is that the defendant is ignoring the judgement and the district court won't enforce it. What's the point of having a contract when it won't help me get the money owed?
  8. Stupidity Does Not Get Rewarded

    by Kunal As a fresh new Spring 2012 graduate, I started my very first job in September 2012. My two bosses made the offer sound so ridiculously appealing: "you will make a fantastic commission at the end of the year! You will earn a six-figure salary if you join this company!" With Judge Judy's car sale example, they were the VERY talented car salesmen. On the first day of the job, I went into the job WITHOUT a contract signed. Their excuse? "Oh sorry, we did not have time to fill it out. Don't worry, we will get to it!" Being so incredibly naive, I said no problem. BIG MISTAKE. Two months in without a contract signed, I saw that this company was scamming me. My bosses turned into tyrants and started changing clauses left and right in my contract. My end-of-the-year commision had so many stipulations added. I had to quit. They did not pay me my last month's salary. I can't go to court to fight it because there was nothing in writing. I can hear Judge Sheindlin now: "What is wrong with you?!"
  9. Don't ever mix romance with loan and if you do....

    by Lin This was at least a decade ago. My long term bf wanted to get a second bachelor's degree. He knew from me, that my parents were in a good position to help him (his parents couldn't afford it). We went together to my parents, and my parents agreed to help him co-sign for a loan as long as he paid  the loan back and was  current about it. He was so thankful and agreed to pay the loan back (he appeared sincere and grateful), but it was a verbal agreement, no written contract drawn. We broke up after he graduated. He defaulted on the loan then he left the country (still living abroad until today). He ignored any communication from my parents about the loan almost costing them their good credit (so my parents ended up paying the loan off). After watching Judge Judy, I learned a lot of things I should/could've done to prevent my parents losing so much. It's still a sore topic in our family today. Never mix romance with loans and if you do loan/co-sign, better have iron-clad clad contract.
  10. Not all friends are honest

    by Judy R. I am a beautician and have a business in the lover level of my home. One of my customers was an old friend of ours. I asked if he could replace the sill leading into the shop and he said he'd give me a good deal. It took him quite a while to complete the job. He also said he'd put a new lock on the door. I told him I had put them on before and I would do it. He said he would and not charge me. He finished the job and billed me $325 for the sill and lock. If I had had him sign an estimate I wouldn't have done it. I could have put in a whole new door for close to that. He left the container for the lock in my garbage. I took it to the store and he had charged me double for the lock. He goes else where for his haircuts now. My scissors may just slip.
  11. Trade Work

    by Carmina My husband did trade work with a business partner when building our homes. He was a contractor and my husband was the granite person. Well, everything was a verbal agreement and when the relationship went sour, the contractor put a lien on our home, took us to court. He also took ALL the equipment from my husband's shop. It was a mess in court, and If my husband would have had "a signed contract" it would have been much easier. We lost the home and had to start the business all over again.
  12. Contracts for dummies

    by Karen I learn by watching and listening. Read, read, read, then take it to a lawyer. Spend a little now, save later, unless you want to meet Judge Judy.
  13. Credit Card Machine Nightmare

    by Rachel I opened my own hair salon a couple years ago, and I needed a credit card machine. A co-worker recommended a company and I signed the lease not thinking anything really could go that bad. Boy was I wrong! Turns out the lease was for 5 years and they also had a clause in the lease that they could debit any amount from my account they wanted with written notice (which they did). After that, I called to cancel my lease and to find out where to return the machine. About 9 months later, they call me and tell me that the lease was with 2 businesses. A few month later, they sued me for the rest of my contract ($6,000). I almost had an attack. After another year of angry letters, better business complaints, and phone calls they notified me that they went to court without telling me and I have a judgment against me. I went to court and we settled for $2,000 last week. That was one expensive lesson learned!!!
  14. Mortgage contracts

    by Glenn In Australia, since July 2011 is it now illegal for any bank to impose 'break charges' or an 'exit fee' if one of their customers choose to refinance or move to another ban with their mortgage. I sold my house last week and my bank imposed those charges on me - $4000. I told my bank it was illegal for them to do this, but they pointed out that I signed a contract that if I didn't stay with them for 5 years, they could do this. Not to mention I signed the contract on June 2011. I took it on the chin in order not to delay my move to my new house. It was a lesson learnt - read everything. Check your dates. Know your facts.
  15. Be extremely specific!

    by Edwin I once entered into a written contract to have the sink plumbing replaced and cover the antique back splash tiles that were missing. The contract stated that tiles in the repair area were to be replaced. I understood that it was along the whole line where tiles were missing (in two walls), but the plumber understood that it was only around the faucet area. So the term "repair area" became an issue. There was a complete line of missing tiles one two walls where the plumbing ran. The rest of the kitchen was already covered with such tiles. To me it was only logical to cover the whole area with the missing tiles, while to the plumber it only meant the sink area where he had to do the repairs. After a long and hard negotiation, I ended up helping him to cover all the area where tiles were missing. Therefore, I learned that I have to be ridiculously explicit and specific to avoid inconvenient misunderstandings.
  16. I learned my lesson.

    by Windy In 2004, I got a job and I wanted a phone, so I went to the phone company and got it. I signed a contract and i understood it. but I went to the store one day and this person ran into me and made me drop my phone. I went to the phone company to see if I could get it replaced. Well, it didnt happen.
  17. The Will

    by Catherine My father had the best intention with his will, but it was not explicit. In short, he wanted to make sure that his paid off home would be a safety net to live in for any of his children that might need it. The home was to be rented with the monies going to property tax, insurance and maintenance until such time as a child needed it. Then the child that lived there would pay the expenses. After my father passed, a sibling made us aware of an agreement she had with our father where her family would move into the home. They would live there and their labor would be their share while the rest of us would cover remodel costs, tax and insurance. The home was sold and our relationships damaged for a while. This taught me that wills must be explicit and that business and family is not always a good idea. And that when verbally agreeing to something that has a deliverable, date or financial aspect, whether family, friend or employer, get it in writing (email validations at work, work).
  18. Gym contracts .... Beware

    by Melissa January comes and with it the desire to get in shape. A local gym was offering a nice deal on a membership. I perused the contract but listened instead to what the salesman was promising me. I could terminate the contract if I had proof I was moving out of the area. I handed over my bank account details for automatic withdrawal ( you got a better deal that way) and I was a member. We received orders to a new state a year later. Of course it's not that easy to break the contract even done legally. No one at the "contract department" ever answered the phone or called you back. The office was empty but for a desk and phone. This gym was notorious in town for this scam. I had to hire a lawyer. Expensive lesson. Do more than just peruse a contract. Investigate. Also be wary doing auto pay from your actual bank account ( ACH transactions). It's not worth the 10 buck discount you get. Set up auto payments YOURSELF from your account.
  19. Betrayal

    by Kimberley I put in a 60 day notice to move and a few days before my move, my sister asks me to contact my management and ask if I could stay and renew my lease and she was going to move in with me. A few days before moving in she tells me she is not moving, and leaves me with a year lease. I want to sue her. I sold furniture to accommodate her and now I can not afford the lease and I will face eviction and my credit ruined.
  20. Signing Authority!!!

    by Real LIfe Stories For a business contract, I entered into a marketing agreement and finder fee with someone who was a board director, however did not have SIGNING AUTHORITY. After closing the deal for the company, this person clipped my commission and took credit for the investor. Suing this person for negligible representation at best (as a justified outraged and ripped off 'crazy woman') would further give credence to these misogynists. Lick your wounds privately and move on quickly and quietly knowing better NEXT TIME ladies! Under the signature, add 'person to bind the company and initial it. Also, ask them POINT BLANK, "DO YOU HAVE THE AUTHORITY TO BIND THE COMPANY." (Be sure to smile warmly and wear your red lipstick.) Remember you are in it for the money honey and get your due respect elsewhere. Men do not want to lose to a woman and will use whatever force necessary to make sure you do not one up them. If you do need to go to court, remember that it will cost 250 and 2-5 years of your life.
  21. Kitchen Renovation Lesson

    by Linda Even with a contract. Be careful...please. 23 years ago, we had a kitchen renovation and it went very smoothly. My husband had a clause put in that said if the builder did not finish on time, every day over would be $100.00 taken off the final bill. The builder was wonderful and finished on time. We met a very nice man who promised us so many things for the new kitchen. His two little sons played baseball. Our two sons had played baseball....so the two men, my husband and the builder really hit off and we really let our guard down. the contract did not specify many things, we just believed him because he was so " nice" It was a two week job that lasted many months. Extras that were promised were not done. Right after it was finally done and paid for, the new plumbing broke under the sink. We sent a bill, no reply. I was going thru four months of chemo at the time and this man did nothing but delay, delay, delay. I was sick and he had no conscience. Don't get friendly with your builder
  22. Lease agreement

    by Brian When I was in my early 20's, I signed a standard lease for a studio apartment - my first! The security deposit was high $600, but I am a pretty clean person. When the landlord did a walkthrough at the end of the lease, he instantly went to a closet and pulled a comforter from the very top shelf which had multiple cigarette burns. I told him I was a nonsmoker but, of course, to no avail. Take photos of everything the day before you move in and the day you move out...every nook and cranny. While that was a difficult lesson to learn, that landlord, I am sure, ultimately lived a much unhappier life than I have.
  23. Specific Performance

    by Mm In the late 70s, I was buying a condo that was to be built. I gave my hundred dollar check to secure the price. A year later I received a notice that the check was expired and I would have to issue a "new" one. Well, having a father who was an attorney helped, as I read EVERTHING in that notice. Sure enough I saw that they raised their price. Forgetting what my Dad did, I called and told him what I read and that I couldn't afford it at the new price. He the wrote a letter (on his letterhead) stating that he was going to file two lawsuits - one for specific performance and another called lis pendis. Need I say more. I am now the only person who paid the original price and am still living here. Somewhere along the way growing up, I learned to READ EVERYTHING and still do. Now I pay for a lawyer.
  24. Read, Read, Read!

    by Martin When purchasing a new modular home, I reviewed, after the approval of the loan, an addition of "options" added onto the contract, after it was signed. The loan was approved. I caught the intentional "error", discussed "legal" options to the dealer, whom settled without argument. (He had a funny way of reimbursement, but, it was reimbursement). After checks are signed, follow up with appropriate payee's to veryify payment. (As also, a "re route of payee" was made upon the check, during the home purchase. DONT sign a blank check during escrow process. Make sure there is a NAME on the payee). These two incidents took place in "one" deal...A home purchase. Read, Read, Read. If you sign, as most do, read, read, read, and act upon any misconduct and or errors immediately upon discovery, if signed! Either way, "read"! There is no better educator, than that of the Judge.
  25. We HAD a Contract

    by Peggy My husband and I decided to put in a concrete driveway. John's a sucker for a good line, unfortunately, and our contractor was not the best choice. When the next rainy day brought run off into the garage;we knew there was a problem. We had a contract. John had left it in the garage. But when the contractor was gathering his tools (and a couple of ours) to leave, he seems to have "gathered" our copy of the contract, as well. We were unable to contact him, to tell him to make repairs to his work. We paid another contractor to break up the concrete and lay a new driveway. We finally tracked down the 1st contractor and took him to court, but if we had had that contract in hand, things might have worked out better, or at least a little sooner. John's wife would have been less frustrated.
  26. Learned the Hard Way

    by Kay My sister bought a clothing store and asked me to work as her bookkeeper. She would rent me an apartment above the store, which would need paint or wallpaper. She would pay for the materials but I had to provide labor or do it myself. Not having the needed wardrobe, she allowed me to get clothes from the store and pay as I could. My first day, I learned she'd hired someone else as her bookkeeper but wanted me to stay as a salesclerk. Having moved and giving a job, I stayed. After purchasing wallpaper, she refused to reimburse me for it. A few months later, and a falling out, I quit. Owing more on the clothes than what the wallpaper cost, I decided to pay 'til my bill equaled the cost of the wallpaper and not give her another cent. She sued me first and testified, I hadn't paid on my bill. I produced receipts to show I was paying but the judge still ruled in her favor. With evidence and a witness on my side, she still won. Sure wished I had the offer in writing.
  27. Huge $ Difference Because It Was In Writing

    by Jeri I worked my first real full-time job in 1977. When I decided I needed to make more money I went looking and found a job paying $225 more a month--which was a substantial difference when you consider I was making $600 per month at the time. Within two weeks of starting the new job the prior employer contacted me and asked me to return to work for them. While they couldn't match the salary of the new employer, they were close and they said I could plan on about $1,500 in profit sharing after working a certain amount of time. My very wise husband said "tell them to put it in writing," which they did. Within a year or two, the company was dissolved and the profit sharing funds were distributed. A co-worker who started the same time I did received a check for $50 and my check was for $1,500. I now get EVERYTHING in writing!
  28. I Bring a Magnifying Glass:)

    by MARIE Anytime I buy anything, I read the fine print and take out a magnifying glass to the surprise of the vendor :) and I ask what I don`t understand what it means. For oral contracts, I always do it with a friend present. this way, the other person cannot deny it. I have a small claims court case and because I have been watching Judge Judy I found a valuable proof of purchase. I had made her sign in my agenda that she owed me a balance of 500$ Which she claims she paid me! Plus, I found proof of the day she said she came with me to pay the 500$..that she lied as on that date..I was in the small claims court office making a claim against her. Thanks Judge Judy!
  29. Read 'em and make THEM weep!

    by Shannon I was buying my very first brand new (only 8 miles on it!) car and settled down to read the contract they had prepared for me. The salesperson kept trying to get me to turn the pages by "telling" me what was on the page. Finally, I just looked at her over the top of my glasses and said "I can read, thank you. It was a prerequisite for my library degree." As I got to the page where all the numbers are jumbled together, I discovered that while they had quoted me one interest rate, they had typed in one that was 6% higher. I simply crossed it out, put in the correct interest rate and handed it back to the salesperson. I thought she was going to cry. Always read BEFORE you sign!
  30. When it IS appropriate to sign IMMEDIATELY

    by Shoshana I am not relating a personal experience though I want to defend a specific "contract" that get signed without first being read carefully... When a woman is in labor and the doctor puts a contract in front of her face and says "Sign!! We need to do an emergency c-section to save your baby!" Do you think that is the time to start reading fine print? I know I wouldn't.
  31. Signing contracts

    by Donna We signed a contract with a propane company in 2004 and this year (2012) we wanted to change to another company that was a lot cheaper. The fine print said that it would cost us 106.00 dollars to terminate our service, and so much for the propane left in the tank, that they would have to remove. We ran the tank completely empty and we had to pay the 106.00 to get out of the contract. Always read the fine print. We did not need to sign contract with our new supplier who is more business like and we are happy with them. We learned our lesson.
  32. Transmission rip off

    by Pete I had trouble with my transmission and found a repair shop on the Internet, 1st mistake. Their internet site said they had earned their BBB rating, It also gave a price (too good to be true). I had them pick it up and did not hear from them till I called back on Friday. By then he had emailed me a contract that I signed. When he called the price had doubled! I asked how much do I owe and he said $945 or something close to that. He said if I did not decide that day storage fees would start at $40 a day. I started researching him and found out hes been cheating people for years. Some who came up with the money and got the trans in pieces and towed it to a different shop. I talked to the town where he was operating and they knew of him. The shop I took it to knew of him. He had taken his next victim. I plan to sue but have not done so yet.

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