As president of the Continental Congress, John Hancock signed the Declaration of Independence with a large flourish. The urban legend was that he signed his name so large that King George could read it without his glasses.
At the time, the declaration was a treasonous act against England, which prompted Ben Franklin to say as he signed, “We must, indeed, all hang together, or most assuredly we will all hang separately.”
Hancock’s signature, regardless of the intent, was a brave act, quite literally putting his life on the bottom line.
While potential hanging for treason is extreme, putting your signature on a contract can be harmful to your economic health. If you are going to get a loan and buy a house, your “John Hancock” will be required enough times that it will take you about half an hour to wade through all the documents with thrilling titles of “Lead Based Paint Hazard Form” and “Tax Proration Instruction Letter.” Going through the closing on a house is to ensure that the buyer is aware that payments are going to be needed for possibly the next 30 years — a big commitment with big paperwork.
Unfortunately, not all contracts make such a big deal about the seriousness of the commitment made when the contract is signed. One of those documents that is so easy to sign and so hard to extract yourself from is the Motor Vehicle Contract of Sale. The document is only one page (two sides), but when it is signed, a car has been purchased.
Pay careful attention to the Financing Disclosure section of the contract. Section A is for cash buyers or buyers who already have their loan in place. Section B allows for the seller of the automobile to arrange financing. The contract is filled with blanks allowing for a range of interest rates, payments and loan durations.
It doesn’t matter what the sales representative says — if a loan can be obtained within the range specified in the contract, you have purchased a car on those terms.
Of course, you should never sign a Motor Vehicle Contract or any other contract that is filled with blanks that can be filled in later. I don’t think Hancock’s signature would have been so bold if the Declaration of Independence were written like this for the English to fill in the blanks:
“King George is a ________ and a _________ and I’d really like to __________ him.” Yet, almost all of us sign contracts that bind us to similar terms as dictated by a bank’s credit card agreement.
You can find your bank’s credit card agreement at http://www.consumerfinance.gov, which has a database of more than 300 credit card agreements. I went to the first agreement on the list and copied the language relating to the interest rate charged by the agreement:
“The FINANCE CHARGE (ANNUAL PERCENTAGE RATE) will be between 9.75% and 17.50% depending on (the institution’s) standards for creditworthiness.”
This is actually on the conservative side. Many agreements allow the lender to raise the interest rate to 30 percent or higher. So every time you sign the credit card slip at the store, you are agreeing to pay the interest rate your bank thinks you should pay, not what you were originally told in the marketing material.
Signing on the bottom line is a brave act. You are committing, if not your life, your money and your property. Feel free to sign big and proud as John Hancock did, just know what you are signing.
E. Kent Winward is an Ogden attorney. He can be reached at creditcorrection@gmail.com or 801-392-8200.
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