Video of Understanding What Is in Somebody Else’s Form Contract
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Probably the most common pitfall is they don’t really realize what it is that they’ve agreed to. This is one that is very difficult to avoid in our modern times because we are faced with lengthy documents all the time that we are almost forced to go along with. Really no realistic opportunity to get familiar with the terms of the contract.
I’ll give you an example. Just a couple days ago there was a notification on my iPhone that it was time to update with the most recent operating system with what Apple has come out with and I thought ‘well I want to stay current here’ so I went through and pushed all the buttons I needed to push to download the update to the new system and then it said oh wait, first before we allow you to download this to your iPhone, we want to make sure that you’re in agreement with the terms of our licensing agreement here so push this button to review the terms. Then it comes up with this super complex document going through all of the licensing terms for this software and at the bottom of it there’s a box that you can check for ‘I agree’ and once you’ve agreed, then you can download the software. If you don’t agree, you can’t download the software. There’s no opportunity to chat about it with Apple. “Hey, you know what, I don’t really feel comfortable with this term here on…”, that’s not going to happen. You either take it or leave it.
That’s really how a lot of the contracts we encounter, especially as consumers, are today. There’s really no opportunity for negotiation. To some extent, that is unavoidable. But even in a business context, you will frequently encounter very sophisticated contracts where there is very little opportunity for negotiation of the contract.
Think about the kind of agreements that you sign when you lease a property or when you purchase a property that’s going to be financed by a bank. Very sophisticated language in those contracts and in general very little ability to bargain as to what those terms are going to be. If it is the case that you are not in a position to negotiate those terms, then you at least need to be real clear on what those terms are that you obligating yourself to.
There’s a couple of ways you can do that. One, you can read the contract and that’s going to give you some idea of what those terms are but a lot of that may also seem like a foreign language to you. It is highly advisable if this is a significant agreement that you’re entering into that you review it with your counsel, because many of the terms that you’re going to encounter in that agreement are very familiar to most lawyers who draft agreements and who advise their clients who are entering into agreements, and the lawyer can translate it to you in terms that are more accessible to you and put it into a real world context as to what it’s going to mean for your business.