The Relationship of Contracts and Consumers
They never end….ways to get your money. Like my youngest brother says, while you work to put some money in your pocket there is someone working to get your money out of your pocket. There are many invitations to profit and “great business opportunities” available on the Internet. Heck, check the Junk folder of your email inbox. But even when you pay for services or purchase what appears to be a legitimate product there is the possibility of issues arising.
One recurring issue is that of agreements for home security monitoring systems. The New York Times recently featured an article on how one unsuspecting consumer was duped into signing a contract extension for an unwanted home alarm system. Another ongoing issue is the frequency with which vehicle service contracts (VSC) which are referred to as extended warranties and otherwise misrepresented to consumers. Too often a used vehicle dealer promotes a VSC as providing protection for future vehicle problems and represents the VSC as (1) binding the dealer and (2) covering virtually anything that would go wrong with the vehicle. Unfortunately, item (1) is almost never the case and item (2) is rarely the case. Read here for the significant differences between vehicle service contracts and “true” warranties.
From time to time I have received phone calls and emails from clients who signed contracts without reading them or asking important questions before signing. This is a huge no-no. There is a myth floating around that you automatically have some period of time to cancel a contract you sign. This myth may be to blame for some people’s failure to read before signing but I want to clear it up once and for all: UNLESS YOU SEE A CANCELLATION PROVISION IN THE CONTRACT OR THERE IS ONE SPECIFICALLY CREATED BY SOME LAW (AND YOU BETTER BE ABLE TO IDENTIFY THIS LEGAL PROVISION BEFORE SIGNING) CONSIDER THE CONTRACT BINDING UPON SIGNATURE.
The current trend in the business world seems to be to use boilerplate contracts with dense language and multiple business-friendly provisions to take away consumers’ rights. In two separate decisions the United States Supreme Court has ruled in favor of large businesses (AT&T and American Express) who sought to hold their respective customers to language contained in lengthy virtual contracts of adhesion. As a consumer lawyer it troubles me to see how the odds seem to be stacked against the individual consumer when it comes to contracts and agreements.
And to further complicate matters a recent decision of the North Carolina Business Court held that in some situations one can be bound by a contract even when they failed to sign the contract but……it should be noted in this decision the person held bound by the contract took actions consistent with the contract (i.e. made payments as contemplated in the contract). In other words, acceptance via actions was sufficient for the Court to hold the party to the unsigned contract.
Contract matters are all around us. Do not make assumptions or operate based on myths or friendly advice from people who may not really know. It is best to speak with an attorney about your contract question or situation. We are all consumers and the more education you have the better protection you have. Visit the O’Neal Law Office Free Information Center for resources and tips on your rights as a consumer.
- Posted in: Consumer Law/Consumer Protection ♦ Legal News
- Tagged: agreement, American Express v Italian Colors Restaurant, AT&T Mobility v Concepcion, binding, boilerplate, bound, business-friendly, cancellation, consumer, extended warranty, misinformation, myth, North Carolina Business Court, right of rescission, United States Supreme Court, vehicle service contract, waiver