9.3 Contracts and Warranties

Notes

A contract is a legally binding agreement. Read before you sign.

• Look for: total cost, length, fees, auto-renewal, cancellation terms and penalties.
• Ask questions and get promises in writing. Keep a copy.
• Don't sign under pressure, and don't sign what you have not read.
• A warranty is a promise to repair or replace a product within a time. An extended warranty costs extra and may not be worth it.
• Example: a gym contract has a $60 sign-up fee plus $25 a month for 12 months. Total $= 60 + 25 \times 12 = 360$, so $360.