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Contracts: What's Hidden in the Fine Print?

We're surrounded by legal, contractual language every single day. Consider this: Research cited by The Atlantic suggests that the average internet user visits nearly 1,500 websites per year, and each website has a privacy policy that's about 2,500 words long. Reading all of those words for every site would take you an estimated 76 work days to complete.

It's no wonder that most of us click the "accept" button as soon as it comes up rather than reading the fine print. But when it comes to contracts, what you don't know really can hurt you.

 

Understanding the Average Contract

Contracts are meant to outline:

  • The service you are purchasing.
  • Your obligations as a client.
  • The company's obligations as a provider.
  • How you will resolve differences.
  • How the contract will be maintained.

In theory, these should be documents everyone can read and understand. But as an author writing for the Michigan Bar Journal points out, some contracts are filled with language that is so complex and dense that it is hard to read. Those contracts, the author points out, tend to cause problems because they hide issues consumers and companies should know about before they enter a business relationship.

Renewals: A Common Cause for Concern

One of the contract issues we often see involves renewals. It is not at all uncommon for music providers to include clauses within their contracts that specify that the contract will renew on a specific date unless the customer opts out of this contract within a specific timeframe.

A contract like this might tell you that you must notify the company in writing 60 days before the contract expires or else the contract will renew and last for another year.

Methods of Notification: Another Issue to Watch For

Companies can add on to this issue by requiring you to notify the company in a specific way that you would like to cancel a contract. This language might require you to send a certified letter to the organization in order to notify them of the need to cancel, and they might require you to demonstrate proof of receipt of that letter in order to ensure that the company has been notified.

You may also be required to send the notification to a company address that isn't easy to find on the company's website, invoices, or social media channels. That address may only appear in your contract. If you send your notification to the wrong address, your contract may renew.

Cancellation Clauses: An Expensive Issue

Why do contracts contain such explicit language regarding renewals? Cost lies at the heart of this question.

According to Harvard Business Review, it costs between 5 and 25 times as much to gain a customer compared to retaining an existing one. The longer companies can keep you locked into a contract, the less they might have to spend in getting new customers to join the business. Contracts can keep you in place, whether you are happy with the business or not.

A cancellation clause will require you to pay a penalty for leaving your contract early. That fee could be part, or all, of the fees you might be required to pay if you kept the contract in place as agreed.

Clauses like this tend to be firm, meaning there is no real wiggle on when they apply. If you are one day late in notifying your vendor and your contract renews for a year, getting out of that contract early could mean paying a year's worth of fees with no service at all.

How to Spot Issues of Concern

Reading each and every line of a contract is a good business practice, and it is rare. For example, in a study cited by The Guardian, 543 participants were given contracts to read in order to be part of a new social media channel. Only a quarter of those students read the fine print, and all agreed to the terms of service. Deep within that contract was a clause that specified that all students agreed to let the company name their children.

This example may be amusing, but putting your business on the line is far from funny. Before you agree to anything that might take control away from you, read each and every line and make sure you understand what is said.

In some cases, if the language is particularly dense, a lawyer might be appropriate. But if you can understand all of the words used, it might be a matter of simply taking the time to read what you've been given.

Work With a Trusted Partner

In addition to honing your reading skills, you can look for partners that offer straightforward, easy contracts with no sneaky clauses that could cost you money in time.

For example, at Cloud Cover Music, we offer both monthly and yearly contracts. If you want to cancel your subscription, just contact us. We'll stop your service as soon as you tell us to do so. We don't hide behind formal language or legalese. We want to create lasting relationships with our customers, and we think that's only possible with transparency. You can trust us not to play games.

We also offer a trial period, so you can determine whether or not our service is right for your business. Unlike other companies, we don't require you to give us a credit card number in order to sign up. We're not planning to charge you until you've decided that you love our products, so getting your card number isn't necessary.

Are you ready to get started? Contact us at sales@cloudcovermusic.com.

From $17.95/mo|Music Designed for Business

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