Finance Quick Answers
Are contracts important?
A contract is a legal agreement between two people who buy, sell, borrow, loan, rent, repair, or trade. It can be written or oral and spells out the terms of the agreement. Written contracts are much preferred over oral agreements, however.
Before you make a decision involving a contract - get
it in writing. Make sure you understand the contract
before you sign it. Ask questions if necessary.
Changes can be made before you sign; both parties
should initial any changes. Make sure everything agreed
upon is written into the contract. Don't sign anything
until all the blanks are filled in. Keep a copy of the
contract in a safe place.
Remember, you'll have to live with what you sign!
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Tuesday, July 15, 2008