Seven items you should know before you enter into a contract

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Entering into a binding contract is something you probably do more than your think, and think about less than you should. Virtually any time you apply for credit or financing you are entering into a contract, the elements of which you need be cognizant of.

The Financial Consumer Agency of Canada recommends consideration of the following steps before entering into a contract:

  1. Shop the Market: Look at different companies, their offerings, and their manners of delivering the product they are offering. A brokerage offers products from more than one company; usually accessing product from a base of tens of competitors. Ask questions, and assure you attain the product best fitting to your needs and your budget.
  2. Investigate the Company: Make sure that the company you are dealing with is approved with the Better Business Bureau, and comes highly rated and recommended.
  3. Power of Negotiation: If you’ve shopped around and investigated the company, you should be able to negotiate the terms and rates you know are available and want. Your broker will negotiate with lenders and providers on your behalf.
  4. Review Your Contract: Don’t sign if there are items that you don’t understand, don’t agree with, or blanks left to be filled in. Ask questions and only sign when the contract is completely explained and clear to you. Your broker should fulfill this procedure with you. In more complex situations, such as land title transfer, you should go over the contract with a lawyer.
  5. Stay Connected: Ensure that you have all the contact info for the professionals involved in providing the service for which you are entering into the contract. This means e-mail addresses and phone numbers where you can reach the company in the case you have questions or concerns.
  6. Take Responsibility: A contract is a legal document. When you sign, you are agreeing to the terms and conditions within. Changing these terms may become an expensive legal process after the fact, so ensure you’re in complete agreement before you sign.
  7. Keep Records: Always keep a copy of any contract you sign and all of the backing paperwork. Your broker should provide you client copies of all materials relating to your transaction. If there is anything missing, or you require more information, ask your broker and they will provide it to you.
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