Contracts Everywhere

I recently handed over my car to a valet parking at Venice beach in Los Angeles. Just before I let go of the key, I noticed a sign saying

This contract limits our liability. Read it.

The intention was clear: By handing over my keys, I was implicitly agreeing to the contract. The contract was printed with small type, on a poster, sitting in floor height. So in order to know what I was agreeing to, I’d have to get down on my knees, take out my glasses, and spend ten minutes reading it. By the time I was done, my company would surely have considered me a whacko and left.

We constantly agree to contracts like that. When you sign up on a web site, or start using a piece of software, chances are that you’ll be asked to agree to a license agreement. When you go to a new video store to rent movies, you have to sign a contract. If you want to get a cellphone, you have to sign a contract. If you want to get internet access, you have to sign a contract. If you want to work out, you have to sign a contract. If you want to subscribe to a magazine, you sign a contract. If you want a place to live, a job, cable tv, or a credit card, you have to sign a contract.

Honest to God, how many of you read those contracts thoroughly before signing? How many ask for your lawyer’s advice? How many read them just briefly? Even though my father preached that I should always read everything before signing, truth is, I often don’t. When I’m in a video store, and I just want to go home and watch that stupid movie, I’m inclined to skip the reading part, and just sign.

But often times, I will read it, only to find that it takes so much effort to read the legalese it’s written in, that I don’t bother reading the whole thing: I just read the “termination” clause. And at that valet parking, I’d never bother reading the contract.

One noteworthy exception of a contract deliberately designed to be read is the Borland No-Nonsense License Agreement. I don’t have a copy handy, but I recall that it specifically said “Even if you normally don’t read contracts, read this”. It’s written so normal people can understand it. It basically says that their software can be used like a book: Only one person can use it at a time, just like with a book. But you can lend it out or pass it on, just like a book.

Uneven Playing Field

Companies, even small ones, can easily afford to hire a lawyer to craft a contract for them. Of course, such a lawyer will diligently look after the company’s interests, and won’t spend a minute looking after the customer’s interests. They know who’s paying their bills.

Yet, when I’m in a situation where I have to decide whether to accept it or not, I don’t really have a lawyer handy. And of course the companies know that, even though they behave like they believe every human being is walking around with a Lawyer-in-a-pocket™. Heck, even the lawyers I know wouldn’t have read that valet parking contract. They have lives, too.

How would the valet parking guy have reacted if I had pulled up a contract of my own, and said that this was my contract, looking after my interests, and that he’d have to sign it in order to get my business? He’d have refused, of course. Who do you think has the bargaining power?

Just reading select sections, of course, is far from bulletproof. Most contracts clearly say that the headings of the sections aren’t part of the legal document, and so, they could easily place a special notice about the termination policy somewhere not under the “Termination” header at all. Or they could try to sneak extra stuff in on the back side of the contract, with extra fine print.

So you’re not going to read the contract. But at least you can ask the sales person, right? Well, no. Your salesperson could happily be lying you straight in your face. “Yes, you can terminate at any time.” Yet, the contract says you cannot terminate the first three years. “Your monthly fee is only $5”. Yet the contract says it’s $50. When it comes time to argue over it, what do you think counts more, the contract, or your postulate of what the salesperson said? <a href=”http://www.epinions.com/well-review-1C43-136D8C15-3A0AE564-prod2/tk__{CB001.1.59”>Well?. It turns out that Bally’s Total Fitness is really <a href=”http://www.epinions.com/well-Fitness-Gyms-All-Bally_Total_Fitness/show_}allop/listype__{opnr/tk_}CB008.1.24”>playing this game to it’s fullest extent. Stay away from there!

Now, it may turn out that the contract doesn’t even hold up in court. But how would you know? Who can afford suing them for such a “tiny” amount as a couple thousand dollars? I bet that no lawyer will bother with a case that small. Of course, a couple thousand dollars is not a small amount of money to most ordinary people. Just to corporations and lawyers, the ones who craft the contracts that ordinary people agree to.

The reason for this, of course, is the US legal system, forcing corporations to protect themselves no end. But that doesn’t detract from the fact that this contract system is inherently unfair. God dammit, I need to park my car, I have a dinner reservation, I’m meeting people, what am I supposed to do? Drive around for hours in order to find a parking that doesn’t force me to agree to a contract? Hell, no! I have a life to live. Why can’t the way we do business acknowledge that?