Consumer Tips - Contracts

Contract law is a very complex topic and can be confusing to consumers and merchants alike. A contract is a written or spoken agreement between two or more parties, intended to be enforceable by law.

Always read over a contract carefully and do not agree to it unless you are confident that you understand it completely. When possible, have your lawyer or another trusted person review anything that you intend to sign.

Generally, a contract is binding when the following is true:

• the parties intend to make a contract;
• there is an offer and an acceptance; and
• the parties receive something (e.g. the company receives money and you receive a service) in return for their promises.

A contract may take many forms, such as an oral, written or standard form agreement. All are equally valid.

In some provinces and territories, there is an automatic cancellation period for contracts for items or services such as credit, dating clubs, health clubs, funeral and cemetery services, timeshares, natural gas, electricity and door-to-door sales, whether the company tells you about it or not. This is called a cooling-off period and depending on your province or territory of residence, you may be entitled to one, which may vary in duration. A cooling off period is defined as a specific period of time in which you can reconsider your consumer decision. As a consumer, you are entitled to cancel within this period, for any reason you like. But remember this applies only to certain kinds of contracts.

Contact your provincial or territorial consumer affairs office to find out more about the cooling off period, if it applies in your jurisdiction, how many days it encompasses and for what services it applies.

Unless the contract is subject to an automatic cooling-off period, remember that it can be difficult or impossible to cancel: don't sign unless you are positive you want the product or service.

Special Contracts

Health Clubs

When you are considering whether to join a health club, be cautious of the following:

• joining clubs that have not opened: they might never open;
• low-cost "bait" ads: many "switch" you to expensive long-term contracts;
• promises that you can cancel any time and stop paying: check the written contract for the terms of membership and any other promises;
• the fine print: many low-cost ads and contracts severely restrict hours of use and services;
• signing long-term contracts: many consumers quit using the club within a few months; and
• unbelievably low one-time fees with no monthly dues.

Before you sign, be sure to do the following:

• check with your doctor (you should do this before you begin any exercise program);
• visit the club at the hours you will be using it;
• check that promised equipment and services are actually available;
• talk to current members about their satisfaction with the club;
• check out several clubs;
• consider your commitment to a long-term program: good intentions seem to fade as the reality of the hard work sets in;
• read the contract carefully to find out if interest is charged for a payment plan and that all of the salesperson's verbal promises are in writing; and
• check with your provincial or territorial consumer affairs office for any cooling-off periods or other rights that apply where you live.

Timeshares

• Overvalued or misrepresented prizes and awards are sometimes used to promote timeshares and campgrounds. Free awards might "bait" you into driving a long distance to the property, only to attend a long, high-pressure sales pitch to obtain your prize.
• Be realistic. Make your decision based on how much you will use the property and if it provides the recreational and vacation opportunities you want. Don't decide to purchase based on an investment possibility. The property might be difficult or almost impossible to resell.
• Ask about additional costs, such as finance charges, annual fees and maintenance fees. Maintenance fees can go up yearly.
• Compare your total annual cost with that of hotels or your normal vacation expenses.
• Ask about availability during your vacation periods. Ask what other timeshares or campgrounds you may use with your membership.
• Talk to individuals who have already purchased from the company about the services, availability, upkeep and reciprocal rights to use other facilities.
• Get everything in writing, and make sure verbal promises are in the written contract. Have an independent attorney review any contracts and documents, and make sure there are no blanks on papers you sign.
• Ensure that cancellation rights are spelled out in the contract before you sign.
• Check for any complaints against the company, seller, developer or management company with the Better Business Bureau (please refer to the directory at the end of this handbook).
• Check that the property complies with local laws.