What happens if an insurance company does not mention a critical clause of a policy during a telephone purchase? Suppose one phones an insurance company and arrange and pays for car insurance. One then receives the documentation and there is an additional clause that was not mentioned that invalidates the insurance. Is this clause valid? The story that prompts this question is real, but I am not asking for advice as I have solved the problem with communication. I just wonder what would have happened had I said nothing. I just phoned my insurance company to arrange my car insurance for next year. We went through all the details and I was about to accept the offer when I mentioned that my brother was visiting from the US. At that point the salesperson informed me that the insurance would not cover my brother, as they must be resident in the UK. At no point prior to this had they mentioned such a requirement. I therefore declined their offer. I have done this many times before an it has not been an issue. However had I not mentioned this I would have accepted the offer. They may well have sent me a verbose contract with that term in there, but I may not have read it and my brother would have driven the car assuming they were insured. If this had occurred would my brother have been insured? From answers it seems it may be relevant how frequent such a clause is. I have two old car insurance contracts and neither mention such a residence requirement. I have found many more &quot;Certificate of Insurance&quot; with my brother as a named driver and they make no mention of the requirement. It is those that must be shown to the police on request to prove one has insurance. I have found a policy document online that does not appear to mention such a requirement.
In any sane jurisdiction, the clause would hold. By and large, the legal fiction is that one has read and agreed to execute the entirety of the contracts they signed. If it was otherwise, no contract of substantial length would ever be enforceable upon individuals; yet such contracts are routinely offered and enforced (look at the terms&amp;conditions of any internet website that sells stuff). It is absolutely normal that a phone sale would gloss other minor details of the contract, and implicitly refer to the written text for the finer points. If the specific point had been raised in the phone call, and the salesperson erroneously told you X when in fact the contract read Y, you might have a case, but even then it is not necessarily a strong one (you signed the contract after having called; you might have changed your mind when reading the actual text, and you paying the insurance monthly bill is evidence that you agreed with the contract as-formed). There are some exceptions to that general principle: General conditions of validity of a contract. For instance, in france, a contract must have a &quot;definite and legitimate content&quot;. If we sign a contract for &quot;a few apples against a few euros&quot;, and then I give you five apples, you owe me zero euros because the contract was not specific enough to be enforceable. If the whole contract is unenforceable, the clause falls with it. General conditions of a validity of a clause. Specific clauses can be invalidated without bringing down the whole contract (for instance, &quot;in case X fails to perform their obligations under clause 70Z, Y is allowed to take a pound of flesh from X&quot;). Specific conditions on certain clauses. Consumer laws in some jurisdictions make certain clauses of certain contracts either invalid entirely, or only valid if they were read aloud to the prospective buyer, or only valid in certain forms. (For instance, in France, a sale of real estate between individuals must be notarized.) I would be extremely surprised if the rule in the OP’s example (residence condition to bring another driver on the insurance policy) would fail under any of those.
Depending on the circumstances, it may be irrelevant whether or not the the terms of service contain an express clause dealing with inaccurate information. For example, in England and Wales and Northern Ireland, under section 2(1) of the Fraud Act 2006, if you dishonestly make a representation which is untrue or misleading with the intention to make a gain or cause someone a loss you will commit the offence of fraud. This could arise for example if you give a false name intending to obstruct the other party from being able to pursue you for any breach of your contractual obligations (e.g. non-payment for services). As for whether or not you would breach any clause in the contract requiring you to provide accurate information, it's very hard to say without seeing the exact wording and context of the clause.
A written agreement is not required to form legally binding obligations. The common law position is that you are bound by a contract to pay for the services rendered: The dentist asked if they could take out another cavity, with the reasonable expectation that you would pay a reasonable amount. (Offer) You agreed. (Acceptance) The dentist fulfilled their promise to remove the cavity. (Performance) You are now bound to pay a reasonable amount. If you do not, you will be in breach of the contract. However, whether you will be required to pay the entire amount will depend on whether or not $700 is deemed reasonable by a court, or by whatever statutes may govern healthcare in whichever jurisdiction you are in (at the time of writing you have not provided a jurisdiction). A court or statute may limit the amount you are required to pay.
Does an agreement in a chat count as a valid contract? In most jurisdictions (and for most transactions): yes. Usually the only thing that matters for a valid contract is that there is a mutual agreement &ndash; whether that is in writing, orally, via chat or via sign language does not matter. Of course, having things in writing makes it easier to prove in court if there is a problem, so it's still advisable. What steps could I take if they don't send the money? You can: remind them to pay if they still don't pay, you can sue them. Some juridictions have accelerated court proceedings for simple cases like this (e.g. Gerichtliches Mahnverfahren in Germany), otherwise you will have to sue in a regular court that deals with contract disputes. But I have no names and I am unsure what they can or have to do after they received the package. This is going to be the main problem. It's no good to enter into a contract if you do not know who the other party is :-). You definitely need to find out who exactly entered into an agreement with you. If the sale is to a private person, find out their name and address. If the sale is to a business (seems to be the case here), find the official name and legal type of the business, and make sure whoever you deal with is authorized to enter into contracts. Otherwise the contract will be hard to enforce in court if things go wrong.
You asked the rep about how to change some details on your account, and asked him about the cost. It is clear from the recording that you are not changing anything right now. I can't see anything where you state that you want to enter a contract right now, I can not see anything where the rep indicates they want to enter a contract right now. In other words, no contract has been formed. The rep did tell you that a name change will not increase the phone plan price. That was a promise. It was a verbal promise, and you have evidence that the promise was made. Your contract will determine whether the company is bound by such a verbal promise. If you change the name on the contract, with nobody mentioning a price increase, and the price increases, you can surely complain that you were misled and wouldn't have changed the name if you had known about the price increase. However, if you get told that the price will increase before the name change, and you quote the previous promise, I don't think that will force the company to allow a name change without price increase, because your phone conversation didn't create a contract.
Nothing prevents firms from putting clauses like that in the disclaimer. If you're talking about goods (rather than services), much contract formation is governed by the Uniform Commercial Code, which 49 states have adopted (and which Louisiana has adopted part). However, the real question relates to whether that kind of language will be enforceable in court. A common way to attempt to avoid litigation is to insert a clause that requires arbitration of disputes (instead of litigation). The Supreme Court upheld the Federal Arbitration Act (FAA) in Southland Corp. v. Keating, 465 U.S. 1 (1984), so this can be successful. Contracts that have class-action arbitration provisions are a little dicier, but in AT&amp;T Mobility, LLC v. Conception, 563 US 333 (2011) , the court held the FAA preempts state laws that disallow class arbitration.
is this absolutely required to be considered a valid document in most jurisdictions, most notably, the European Union? Not at all. There is no legal requirement that contracts, terms of service, and so forth be drafted, devised, or even validated by a lawyer. Law requires that certain types of contract be notarized. That refers to the moment where the parties sign/formalize the contract, which is different from --and independent of-- whether its terms were written by a lawyer. A messaging service like the one you have in mind definitely is not subject to such requirement either.
The CEO, with his lawyer have tried to convince me that this only apply to current client and any past clients that I have work on. Is this true? No. It will be true only if they make that clarification in the clause or a properly added amendment. The clause currently has no indication that it is limited to "current client and any past clients that [you] have work[ed] on". The CEO's &amp; lawyer's refusal to amend the clause so as to make it consistent with their attempts [to persuade you] would be a red flag. Their inconsistent representations to you suggest that they are not planning to honor the covenant of good faith on which all contracts are premised. Should I expect the CEO to offer a fair contract or is this something you read and negotiate? You should require a contract that seems fair to you. And by "to you" I mean that it has to be in line with your expectations regardless of the average conditions in the labor market. Negotiations are not binding. They are merely a preamble to a contract, and that contract is binding. This is why you should reject a contract that falls short of your requirements. Some clauses are unlawful and/or void and unenforceable as unconscionable or for contravening legislation (unlawful clauses can and do arise even if drafted by attorneys). Thus, although you might not have to worry about those clauses in particular, the company's mere attempt to include them in a contract should alert you of the high risk of ending up with other abusive terms &amp; conditions which are binding and enforceable nonetheless.