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Know Before You Sign A Contract

August 18, 2021
signing a contract

What to do before you sign a contract 

A thousand internet memes could be made of people’s reactions to reading contracts, with scrunched up faces pulled close to the screen and a mix of sighs, groans and “what does this mean?” We’ve all done it. And few people like it. But you will have to sign on the dotted line sooner or later – whether you’re opening a business or a bank account, offering a product or service, renting or purchasing property or taking out a mortgage… there are going to be legally binding documents with your name on it and it is in your best interest to know what in the world you’re signing.   

First of all, what is a contract? 

Broadly speaking, a contract is a legally binding agreement between two (or more) people or entities for a particular reason. In both legal systems in Canada – civil law in Quebec and common law for the rest of the country – you are free to contract for just about anything you like, as long as it’s legal and not against public order. Still, contracts can be confusing. There are a lot of them and they are not always easy to understand. 

Some commonly asked questions are: 

  • Does a contract have to be in writing? 

  • What if I didn’t read the whole thing?  

  • What if it’s not signed by both parties? 

  • Is there is a grace period whereby I can void it? 

  • Is an email a contract? 

With exceptions, the answers are:  

No.  

It’s still legally binding.  

Can sometimes still be binding. 

Mostly no, but in some circumstances, yes. 

Can be. 

So as you can see, there is nothing straightforward about contracts.  

Before you enter into a contract, consider this… 

Keep in mind that when you sign a contract, it is a legally binding document. So make 100% sure that you have done your homework before entering into an agreement. For example:  

1. Is the company you are dealing with registered and reputable? Or did you buy something from John on Craigslist? If something goes wrong, your recourses against the company will be far greater than they would be against John. 

2. If you are unhappy with a product or service (or whatever you contracted for), know the procedures for getting out of the contract, if any, beforehand.  

3. Know who to complain to, should you be dissatisfied. If the person you contracted with is a professional, perhaps there is a governing body you can contact. If it’s something you bought at a local retailer, there are consumer offices across Canada to help.  

4. Most importantly, read the entire contract: front, back, big print, small print, all annexes and any additional documents that go along with it. 

5. And then get in touch with us. Before you sign.

Why it’s a good idea to speak to a lawyer 

There is no reason why you should be on your own when it comes to interpreting the many conditions, penalties, indemnities, liabilities and clauses of a contract. When you sign a legally binding document, you are obligating yourself to do something by law. A lawyer is familiar with the laws, of course, but also the language of contracts. We can make sure everything you want to see in the agreement is there before you sign. And we can make sure you are aware of the fines, penalties and other repercussions should you breach the contract – not abiding by a lease, for example.   

The take-away. 

Because of the legal-heavy language often contained in contracts, most people just skim over the clauses (at best). Since you are bound by the whole agreement and not just the content you read or understood, it is strongly advised to have a lawyer interpret and explain the document for you – before you sign. LegalShield Canada’s affordable monthly fee for an on-demand lawyer is perfectly suited for these kinds of real-life situations. We all have to sign contracts, whether it’s a lease for a house or a car, an employment agreement, a bill of sale, or a loan and more, we are here to help: www.legalshield.ca.  

 

Articles on the LegalShield.ca website are for informational purposes only and do not constitute legal advice or opinion in any manner. Laws mentioned in the articles vary from province to province. Any links to third-party sites in our articles are for general information purposes only and LegalShield is not affiliated with, nor does it endorse, the content of linked sites. It is always advisable to seek legal counsel - and LegalShield can help. 

 

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