What To Know About 5 Life-Changing Contracts Almost Everyone Will Sign

Most of us will sign these five contracts at some point. You’ll likely encounter a few of these many times. Here’s what you should know about each one before signing in order to better protect yourself.

People document their lives through status updates, selfies, and memories, but the contracts we sign also serve as written documentation that we agreed to the stated terms on this date.

Signatures are important. It’s a good idea to think critically, ask questions, and read again before signing yours. A signature has the potential to mean losses, misunderstandings, financial turmoil, or time spent in court.

Contracts can be life changing, and there are standard contracts that almost everyone will encounter in their lives. Here’s how to approach the most important signatures of your life, and how to steer away from signing a deal with the devil.

1. The Terms Of Service Agreement(s)

The first contract most people agree to isn’t one they’ll sign with a pen.

Basic terms of service agreements govern social media websites, but that’s not all. Similar usage agreements rule software, electronics, and even cash machines (that imply agreement when used).

Where “Agree”, “Continue”, or “Enter PIN” is said, a terms of service agreement exists.

A terms of service agreement includes important information, like how the company stores or shares client data, and what accepting the terms of service might imply.

Terms of service agreements can be updated by service providers. Continuing to use the service implies that these new terms have been read, understood, and accepted. If you spot a message or notification that points out the terms are changing, always remember to look at what the changes are.

Tip: Always read the terms of service or usage agreement for specific details, even when it might seem unimportant or lengthy. If you skip over reading it, you could be sacrificing your privacy or data for nothing.

2. The Bank Account Application

The application for a bank account is one of the first contracts that will put a person on the financial map.

An account application will require personal details like your name and physical address, and might also ask for additional paperwork. Of course, it will also need your signature.

The account application states things like the type of account, the interest rate, and the specifics of what the bank will do with your money (including their fees). Always read it with care.

If you sign into any banking terms you don’t fully understand, it could mean years of financial or administrative headaches. Avoid this by making sure that you know exactly what the terms associated with your account means.

Tip: If you are not happy with the terms of your current bank, look around for others. Consumers always have a choice about where they store, invest, and spend their money.

3. The Lease Agreement

The lease agreement is one of the most important contracts that consumers can sign during a lifetime.

With a good lease, you might live in the same spot for months or years. A bad lease can lead to disagreements, costs, eviction notices, and time spent in court.

Most consumers will sign several lease agreements in their life.

Lease agreements should contain basics like the name and address of the lessee (and lessor), but also apply to specifics, such as rent installments, maintenance, repairs, and added costs.

A lease agreement can be complicated. Bad ones can make your life miserable. Consult with a legal professional before signing one. If you are dissatisfied with the terms of your current lease, seek legal help.

Tip: Never feel pressured, forced, or coerced into signing a lease agreement “on the spot” or in the heat of the moment. As a consumer, it’s your right to go through any contract on your own time – and, where needed, together with professional help.

Related: Do You Rent? Know Your Rights as a Tenant

4. The Loan Agreement

A signature made on a loan agreement has the potential to provide cash for necessities, emergencies, or even business beginnings.

Loan agreements can also mean years of paying off credit, developing a bad credit score, or eventually losing the ability to apply for loans altogether.

An agreement should state the terms of the loan, and both the details of the credit provider and consumer. How much are they granting, and how (plus when) do they expect it to be paid back? Essentials, such as the interest rate and added fees, should also be paid attention to before signing.

Credit is the one thing that almost everyone starts out thinking they’ll never use, until the day they need it. Always read a loan agreement with the future in mind, and be sure that you will be able to pay it back.

Tip: If you’ve signed a bad loan agreement (or struggle to pay back outstanding credit), seek professional financial planning help. A financial planner can provide advice about laws, regulations, and repayment strategies, and what they mean for gaining the upper hand.

Related: What is Your Credit Card’s Effective Annual Interest Rate (EAR)?

5. The Admission Form

Hospital or casualty admission forms could be necessary at least a handful of times during the average person’s lifetime. It’s likely that you’ll sign it for yourself or for a loved one.

Admission forms are standard, and must contain the basic personal details of the person who is being admitted or treated.

Together with this, admission forms also ask for the bill payer’s details and terms of payment. Contact details are also requested.

Tip: Signing as the bill payer means that you could be contacted by the accounts department (or their legal department) for payment. If you cannot meet the original terms, contact the institution. Don’t wait for them to pursue you. (See 10 Ways To Deal With an Expensive Emergency Room Bill.)

Related:

• What To Know About Any Contract Before You Sign
• Legal Documents You Need In Your 50s

Reviewed March 2023