Reading the Fine Print – Make or Lose Money

Have you ever gotten a discount coupon with a big flashing sign saying 50% off, but when you actually try to use it, you find out that it’s no good for what you’re trying to buy? There are terms and conditions and exemption somewhere on your coupon which exclude the one item you want to buy. It’s called the fine print. Fine print, the pesky little writing that looks like crawling ants at the bottom of a coupon or contract. You’ll see it on coupons, insurance policies, invoices, credit card contracts. That writing/language may look tiny, but it can have a huge impact.

My friend, Laurie, decided to switch her CRM system when she found a better deal and service. So she called her current service to cancel. Turns out, Laurie had made a 2 year commitment when she signed on for her current CRM to get a better rate. The fine print also read that the contract automatically renewed for another 24 months at expiration unless she canceled it. No problem, she thought; her contract was up in about a month. But buried in the fine print was another provision: “You must give us 90 days’ notice” to cancel. Laurie had no clue she'd agreed to that. We finally managed to negotiate her way out of the arrangement, but it was frustrating and cost her money.

Two clauses to watch out for that could be problematic:

1. Automatic renewal - Vendors often try to extend contracts for a longer term by including language of automatic renewal unless written notice of non-renewal is provided within a certain period. The issue of automatic renewals is being fixed in many states. For example, in California if a consumer agreed to a free trial period longer than 31 days, a company must generally send the consumer a reminder notice between three and 21 days before the end of the trial period. If a consumer agreed to a subscription with an initial term of one year or longer, the company must send the consumer a reminder notice between 15 and 45 days before the end of the initial term.

2. Termination – Check to see if you can terminate a contract when you want or only upon occurrence of certain events. Ensure that there are no penalties for termination.

Fine print in contracts can cost you a ton of money. It can also make you money. Like the high school teacher in Georgia who won a $10000 prize in 2019 just for reading an entire travel insurance contract from front to back. She took out the policy to cover a trip she was taking with friends to London, and she read the fine print like she always did--only she had no idea that, this time, some prize money was buried inside the contract. The contest hidden in the fine print was launched by SquareMouth, a website that reviews and compares travel insurance policies. It started the clever "Pays to Read" contest to raise awareness about "the importance of reading policy documents". 65 policies that included the prize winning fine print had been purchased but none of them had noticed it.

So even though the thought of reading the fine print may be yawn and sleep inducing, it is very important. If you don’t want to do it, speak to an attorney who will do it for you. If you don’t understand the lawyerly language, have an attorney review it and explain it to you.

At Nupur Shah Law, we help with trademark strategy, applications and prosecution. We help with reviewing your work and determining the best possible protection available to you.

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