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Making a Contract - Prevent problems

Prevent problems

Step 1. Do your research

Before making a contract, gather information from credible sources on the product or service involved. For example, if you’re buying a car, try the Canadian Black Book or to learn the average price of the vehicle models you are considering. 

Read reviews from trustworthy sources. Consumer Reports is an independent, non-profit source of product reviews. 

If you’re hiring a service provider such as a contractor or tradesperson, ask for the names and phone numbers of people they have worked for in the past. Phone these references and ask them: what was the quality of the work, was it done on time, and was it within budget? 

Contact the Better Business Bureau serving your area to find out what they know of the service provider or company you’re thinking of doing business with. 

See what other people are saying about the service provider or company by searching online for their name and the word "reviews" or "complaints".

Step 2. Negotiate with confidence

When you make an offer to the seller or other party, say it with confidence. Be polite and reasonable, but firm.

It’s common for the parties to go back and forth with changes to an agreement until they are both satisfied with what is in it. 

Step 3. Have a written contract

Even when the law doesn’t say that you have to have a written contract, you should have one if you are exchanging something that is worth a substantial amount of money. For example, a written contract is a good idea if you are: 

If a problem arises, you can go back to the written contract rather than argue over “who said what” when the agreement was reached.

A contract doesn’t have to be pages long and full of legal terminology. In fact, it’s better if the contract is concise and in language all parties understand. See our tips on how to write a legal contract.

Step 4. Read and understand any contract

Read the fine print on any contract before you sign. Don’t take the signing of this document lightly. 

  • Go over every section of the document, including any text on the reverse side of printed pages. 
  • Ask the other party to explain what things in the agreement mean if you don’t understand them. 
  • Fill in all areas of the document or put a line through them if there are blank spaces. 

Step 5. Don't rush the decision

If the other party makes a counteroffer to your original offer and you’d like to think about it, that’s OK. You can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features.