How many simple documents or forms do you sign each year without reading? When you sign, do you know what rights you are giving up? One of the most common myths about the law is that signing a document means nothing. But nothing could be further from the truth. Sometimes I hear people say, “I didn’t read it” or “I didn’t know that’s what it meant”, but generally speaking that is not going to matter. Legally enforceable documents come in all shapes and sizes, not just lengthy documents signed at a lawyer’s office. So before you sign, understand the bottom line.
Below are 5 common situations and things to keep in mind before you sign:
1. Risky activities – If you are about to participate in a risky activity (i.e. zip lining, river rafting, sporting event, etc.) you should assume that the agreement you are being asked to sign prevents you from being able to sue that company or organization for injury or death, however caused. Before you sign, ask yourself these questions: Is it worth it? What safety measures are in place? Do I have disability insurance coverage if I get hurt?
2. Settling your injury claim – If you are settling a personal injury claim with an insurance company you should assume that if you sign the release agreement, there will be no more money. It does not matter that you did not know that additional problems would arise down the road or that the amount was “unfair”. An ICBC claim, unlike a WCB claim, cannot be re-opened. Once you have signed, your claim is done. Before you sign, ask yourself these questions: Am I 100% better? Have I felt better for a while now? Am I confident that I know the extent of my injuries and I am not worried about further expenses or injuries that may appear? Does the offer from the insurance company address my pain and suffering, past and future wage loss, out of pocket and future expenses?
3. Monthly/weekly payment deals – If you are purchasing a membership or entering into any other agreement that requires you to make regular payments (i.e. rental property, vehicle lease, gym membership etc.) assume that you will have to pay for the full term of the agreement. If you stop making your payments, you should assume that they will be able to enforce payment. Before you sign, ask yourself these questions: On what basis will the company let me out of the contract? Do I want to be committed? Can I afford to be committed?
4. Loans – If you are borrowing money you should assume that it is going to cost you significant interest. Make sure you understand the total cost of the loan in addition to the money that is being borrowed. Monthly payments or other payment plans can be very deceptive in terms of the overall cost. Know the facts. Before you sign, ask yourself these questions: Do I understand the total cost of the loan? Can I afford the payments? What happens if I can’t afford the payments?
5. Termination of Employment – If you are settling a claim with your employer after termination and you are asked to sign a release, you should assume the deal will be binding. Before you sign, ask yourself these questions: In addition to employment standards legislation, do I know my common law right to severance? Does the severance package take into consideration all forms of compensation? How fast can I find a new job?
The bottom line is simply this – if you do not want to be bound by the agreement, don’t sign. If you are unsure about whether you should sign a document, then it is critical that you seek legal advice before you do. There is a reason you are being asked to sign and it is more than just an acknowledgment of funds or an informal agreement. You should assume it is a binding contract, and yes, they are typically enforceable. However, just like many aspects of the law, there are some exceptions, such as contracts involving children. If you have signed a release, waiver or other agreement and you want to know if you can get around it, you should immediately seek legal advice.
*Important Note: The information contained in this column should not be treated by readers as legal advice and should not be relied on without detailed legal counsel being sought.