Jessie signed up for a membership with a new gym.* Thinking about all the errands she had to do that day, she skipped straight to the membership agreement’s signature page and signed. She didn’t think about the agreement again until after she’s hurt on the gym’s malfunctioning treadmill. Unfortunately, under the gym’s membership agreement, Jessie waived some of her rights; her options and potential recovery are severely limited.
If you sign a contract without reading it, you agree to terms you may find disadvantageous and would not knowingly sign. This can have damaging effects, especially if there is a dispute.
Three provisions you should look for before you sign a contract:
- Alternate Dispute Resolution Clause:
Everyone has a right to “have their day in Court,” but this right can be waived by agreement through an alternative dispute resolution clause. An alternative dispute resolution clause may require you to arbitrate or mediate your claim, limiting a person’s ability to bring a dispute to Court. These clauses can also include provisions limiting types of claims a Claimant/Plaintiff can raise. (For more information on arbitration and mediation, click here.)
Before you sign, look for whether the contract has an arbitration clause, so you know whether you are agreeing to give up your right to bring your claim(s) to Court.
- Attorneys’ Fees and Costs Provision:
Oklahoma law allows a prevailing (winning) party to cover attorneys’ fees and costs for a dispute concerning a contract if the contract allows it. Before you sign, check if the contract contains language allowing a prevailing party to recover attorneys’ fees and costs, so you know what you may recover or, on the other hand, payments you could be responsible for.
- Liability Limiting Clauses:
Liability limiting clauses in a contract ask you to give up your right to seek certain damages, cap the amount of recoverable damages, or limit the claims for which you can recover. These include provisions waiving damages caused by simple negligence (carelessness), punitive (punishing) damages, consequential damages, or lost profits. Liability limiting clauses are common in agreements to participate in recreational activities like kayaking and skiing, and may be in your gym membership agreement, phone service agreement, or safe deposit agreements with your bank.
Some of these provisions are valid under Oklahoma law, even if you didn’t read the waiver before you signed it.
Contracts are agreements, and Oklahoma law encourages enforcement of agreements; signing contracts before reading the provisions may cause you significant, unanticipated problems. As always, we are pleased to help review potential contracts before you sign them, or help you determine your options if you have a dispute over a contract you signed. Call us at 405-753-1500. Learn more about Rainey Law here.
*This is a fictional hypothetical based on contract clauses allowed under Oklahoma law. Any similarity to a person or event is coincidental.