Reviewed December 2005

Download a free PDF of this guide.

Use our feedback form for questions or comments about MP715.

Publication search

All words Any word

Editor's note
Printed copy and PDF is in English and Spanish.

Learning for Better Living: Before Signing a Contract

Brenda J. Procter
Department of Consumer and Family Economics

Contracts are part of everyday life. Almost anything you buy, sell, borrow, loan, rent, repair or trade involves a contract.

You make a contract when you use a credit card, rent something, buy insurance, or hire someone to paint your house.

A contract is a legal agreement between two or more people.

It spells out the terms of the agreement. A contract can be oral or written. But it's a good idea to put a contract in writing. You do not need to use special forms or legal language to write a contract.

Basic rules

• Shop around before you make a decision. Make sure you are getting a good buy or deal.
• Read the contract carefully. Make sure you understand it well before you sign it. Ask for help if needed.
• You can make changes in the contract before you sign it. But the other person must agree. Both of you should initial the changes when you sign the contract.
• Do not rely on spoken promises. Make sure everything is written into the contract.
• Do not sign any contract until all the blanks are filled in.
• Make sure to keep a copy of the contract.
• Don't rush into signing anything.

Note
You'll have to live with what you sign. A contract is a legally binding document.

MP715, reviewed December 2005