A clothing company's radio commercial touts "An educated consumer is our best customer."  Unfortunately, too many consumers fail to educate themselves before signing contracts for everything from health club memberships to real estate purchases.  Once a contract is signed, there is little that can be done to get out of the contract unless the other party fails to live up to the agreement.

           A common misconception among consumers is that "I can change my mind and get my money back" even after a contract is signed.  In some limited circumstances, state or federal laws may provide a "cooling off" period, usually three days, in which a consumer may change his or her mind for any reason and cancel the contract without consequences.  In Pennsylvania, such a "cooling off" period applies with door-to-door sales.  New Jersey provides a three-day attorney review period for real estate sales.  Federal law requires a three-day cancellation period for any loan or financing agreement.  Apart from these limited circumstances, however, a consumer is obligated to complete the transaction once he or she has signed on the bottom line.

           Many contracts for consumer goods are multi-page forms with paragraphs of fine print.  You may not be able to change the language anyway, but you owe it to yourself to understand your rights and obligations.  Here are some suggestions to avoid buyer's remorse:

• For expensive purchases (e.g. automobiles, high end electronics and appliances, and certainly real estate), take the contract home and read it away from the pressure of the sales environment.  It is unlikely the deal will be taken off the table in 48 to 72 hours. Give yourself the "cooling off" period before signing.
• If the salesman agrees to change the terms (e.g. upgrades, credits), get it in writing in the contract.  Standard contract forms contain a clause that states nothing promised outside the contract, written or oral, is included.  If you take his word for it, you may be out of luck.
• Understand at least the warranty terms and what happens if the product or service does not meet your expectations.  Ask the salesman under what circumstances you can return the product or cancel the service and get your money back.
• Certainly, a significant purchase may justify attorney review.  Ask yourself is it worth a couple hundred dollars to get advice on a deal involving several thousand dollars of your money?
• Keep all contracts and warranty documents in a file at home for at least two years from the date of purchase.  If something goes wrong, your attorney will have something to work with.

          Recently, a firm client applied for long term disability due to a serious illness.  The insurance company denied the claim alleging that our client had been "treated" for the disease during the policy's exclusionary period for pre-existing conditions.  The client's medical records showed that the doctors considered the disease during the exclusionary period, but felt that it was unlikely the client had the disease at that time. 

          In Ceccanecchio v. Continental Casualty Co., 2002 U.S.App. LEXIS 21496 (3rd Cir. 2002), the United States Court of Appeals for the Third Circuit expressly ruled that mere consideration of a disease in a differential diagnosis does not constitute treatment even if the insured is eventually diagnosed with the condition later.  Yet, the insurance company reviewers, with or without knowledge of this case, seized the opportunity to deny a claim based on a pre-existing condition exclusion.  Had our client merely accepted the insurer's determination, he would have lost significant long term disability benefits.

          Disability policies are contracts with terms subject to differing interpretations.  Insurers will interpret their policies as narrowly as possible to avoid paying claims.  If your disability claim is denied, have the policy and the reason for the denial reviewed by legal counsel as soon as possible.  Most policies provide only a short time frame in which to appeal denials.  Loss of disability benefits which you or your employer paid premiums for can leave you without an income.  Don't simply assume there is nothing you can do when the insurance company decides to deny your claim.

Happy Holidays!
Scott I. Fegley, P.C.