Contracts

A contract is an enforceable agreement between people or businesses. They can be verbal or written. You might enter a contract to make a large purchase, such as a new car; to receive loans for college expenses; to lease an apartment; to buy an insurance policy; or to accept the terms of a new job. Contracts are everywhere in the world, but the most important part to remember is, if you sign it, then you have agreed to obey it and can face legal and financial consequences for failing to do so.

Before you sign a contract, make sure you read it! Read it carefully and thoroughly and ask for clarification. You should never sign a contract if you have any questions or are unclear about a section. If you do not agree with something in the contract, talk to the other party about changing it, and if it is changed, make sure that change is reflected in the signed contract. Do not leave something unclear or unchanged because in the future, if it was not changed in the contract, the change may not hold up. Do not leave any spaces blank; either fill them in or cross them out. Make sure the other party signs the finalized contract too and that you receive a copy with both signatures.

Generally, not understanding a contract is not a defense against any violations of the contract. If you fail to perform a duty in the contract such as paying a debt according to the contract’s terms, you could be in breach of contract. Being in breach can lead to very serious and costly consequences.