7 Costly Things Lawyers Say They Wish You Knew Before You Ever Signed a Contract

When it comes to signing a contract, it's tempting to skip through the legal jargon and simply add your name. But signing a legally binding contract can come with financial consequences you might not be aware of. As you work to get ahead financially, it's critical to avoid making a mistake that could derail your journey.

Of course, the details of the law change based on your location, but these are some general things that lawyers say that they wish you knew before signing on the dotted line.

Most contracts come with reams of fine print. Although reading through the details can be a chore, it's critical to make sure you understand all of the details.

"Often, [hidden] in the fine print of cell phone, credit card, nursing home, and all sorts of other contracts will be a buried, mandatory forced arbitration clause, which basically demands you forfeit your Seventh Amendment right to a jury trial in the event the company you're dealing with harms you," says Danny Karon, an Ohio-based consumer law attorney and founder of Your Lovable Lawyer.

If you sign a contract without understanding the details, you might actually forgo some of your constitutional rights.

If you get into a car accident, the insurance company often sends the victim an offer of a small sum of money to release all future claims. But, accepting the funds could mean missing out on a justifiable higher payday.

"After a car accident, injury victims may sign various documents with the at fault driver's insurance carrier and unwittingly release all claims for a small sum of money," says John Coco, a catastrophic injury attorney in New York. "We had a client who was offered $500 by mail after an accident and our firm recovered $1,250,000 for him. Always check with a lawyer before signing."

As you look through a contract, it's natural to have questions. If you aren't exactly sure how to proceed, you can always enlist the help of a competent lawyer. In fact, if you think you might need legal advice, then you most likely do.

"There is no one-size-fits-all when it comes to legal contracts," says Janene Oleaga, a fertility attorney and founder of Oleaga Law LLC. "The right lawyer is both experienced in the subject matter of your contract, and capable of listening to you and addressing your needs and the requirements of your specific situation."

When you read through a wordy contract, it might feel like there's nothing you can do to change the situation. Luckily, you have the power to negotiate more than you might think, and Eric S. Steele, trial lawyer and founding partner at Arckey & Steele says that it doesn't matter whether you're hiring a contractor or joining a gym, you can (and should) ask for changes to terms that don't work for you.

"Too many people treat contracts like they were handed down from a mountaintop, untouchable and set in stone," says. "But, outside of massive corporations or government entities, most contracts are negotiable."

Within the contract, you should be able to find out how and when you can walk away from the arrangement. "Some deals make this nearly impossible, locking you in with strict notice periods or heavy penalties for leaving early," explains Douglas R. Beam, founder and president of Douglas R. Beam P.A. in Melbourne, Florida.

He says it's important for people to learn these terms upfront, so they don't end up stuck in a bad situation with no easy way out.

As you read through the contract, it's important to confirm that everything is in writing before you sign. "The 'entire agreement' clause trips a lot of people up," according to Beam. "It basically means that what's written in the contract is the whole deal — nothing more."

So, what happens if someone makes a big promise verbally, but it's not in the contract? "Legally, it might as well have never been said," Beam continues. "Salespeople and reps love to make things sound great, but if it's not on paper, you can't count on it."

If someone is pressing you to sign a contract immediately, it could be a red flag.

"Don't sign when you're rushed," says Mark Hirsch, Personal Injury Attorney at Templer & Hersh. "It's a bad sign when someone pushes you. Always read it carefully — if you need to, talk to a lawyer."

It's a lot easier to avoid signing a bad contract than it is to get out of one. As you sign contracts, it's important to understand the details and make sure you protect your wealth along the way.

That means reading the entire contract before signing. If you need legal advice, never hesitate to enlist the help of a lawyer.