The top 4 reasons to read the fine print in your contract

There is fine print language at the end of almost every contract that may appear to be less important than the rest of the contract (it’s not). Many people call this boilerplate language because they assume it is full of standard, unimportant, put-me-to-sleep, lawyerly clauses.

How many times have you signed a contract without reading to the end? It’s important to keep in mind that the words in fine print are just as important as any other words in the contract. Here are four reasons why you should read every single word of your contract:

1. The fine print is contractual

Each word in your contract — including every word in the fine print — is part of the final legal agreement. The fine print can be enforced equally as much as the “meat” of the contract, and it often contains language that may dictate the particular way a contract is interpreted or enforced.

In fact, if you end up in court over your contract, the so-called boilerplate language may define how a judge should interpret the more substantive portions of a contract. It can add significant information about your agreement without you even knowing it is there.

2. The boilerplate language may not be what you think it is

If you are signing a contract, keep in mind that the fine print may not be the same fine print as the last contract you signed.

If you don’t read a contract through to the end, you won’t know if the person who drafted it made a mistake or included language that you didn’t agree upon. Read your contract carefully and make sure each provision furthers your agreement. Remember that every part of your contract is important and enforceable.

3. The provisions you keep in could hurt you

In contract law, nothing is as disheartening as learning that parts of your contract are void or your rights limited because you failed to read the fine print. For example, if you sign a contract that does not fully reflect what you verbally agreed upon, a merger and integration clause may prevent you from raising any evidence of your oral agreement in court.

One of the most common provisions included in the fine print of today’s contracts is the arbitration clause. While most people skip over it assuming that arbitration must be in their best interests, agreeing to arbitrate your dispute can severely limit your rights should a disagreement arise. These clauses typically require you to resolve any disputes through arbitration, and often spell out the arbitration services you must use (ones preferred by the other party, of course). Forced arbitration clauses limit your constitutional right to bring a trial and force you into a forum that can be costly and time consuming. Arbitration can be a great option for resolving disputes, but it should be a voluntary option. If you have an arbitration clause in the fine print of your contract, talk to your attorney about it and your options.

4. The fine print can help you understand the meaning of the terms in your contract

A contract will often contain capitalized words. Capitalized words in an Agreement are typically defined terms. As they are used in the contract, those words may not have the same definitions as you would commonly attribute to them. There is often a “definitions” section which lists capitalized terms and provides their contract-specific meanings. More often than not, however, even if a contract contains a “definitions” section, other terms may be defined in line as they appear with the contract text. So if you only read part of a contract, you may not be able to understand the precise meaning of certain terms that you come across.

Reading the fine print

Don’t rely on what the other side of the deal identifies as the “important parts” of the contract. Also don’t rely on what the other side tells you a specific provision means. Read the whole contract for yourself, or call a lawyer and ask them to analyze the agreement for you.

Take it from someone who spends a large part of his life reading the fine print: It’s not always easy, and sometimes you can end up with really strained eyes, but, as these points show, reading through your entire contract before signing it is very important. Don’t skip the fine print. And, as always, it’s very likely going to cost you less to get legal advice before signing an agreement as compared to what you might pay later if you need to litigate a dispute or get yourself out of a bad contractual arrangement.

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