Top 5 Clauses to Watch in Consumer Agreements

When you sign up for an app, subscription, streaming service, gym membership, or online purchase, you often agree to long terms of service or a consumer contract. Most people don't read them—but a handful of clause types can have a big impact on your wallet and your rights. Here are five types of clauses that matter most, what they usually mean, and what to look for (or push back on) before you sign.

1. Auto-renewal and cancellation

What it is

The contract may renew automatically at the end of each period—monthly, yearly, or another interval—unless you cancel by a certain date. The company will charge your card or payment method again without asking. Many subscriptions work this way: you sign up once, and unless you cancel, you keep getting charged.

Why it matters

If you miss the cancellation window (e.g. you must cancel at least 30 days before the next charge), you pay for another full period. That can mean an extra month of a streaming service you've stopped using, or a full year of a gym membership you forgot about. Some companies make cancellation easy (one click in the app); others require a phone call, a letter, or jumping through hoops. The harder it is, the more people give up and keep paying.

What to look for

• Clear instructions on how to cancel: in-app, email, phone, or mail. If it's buried or unclear, that's a red flag.
• How much notice you must give (e.g. 30 days before the next charge). The shorter the notice, the easier it is to avoid an unwanted renewal.
• Whether you get a reminder before they charge. In some places the law requires this; even if not, it's fair.
• Right to cancel without penalty during the term where the law allows (e.g. cooling-off periods in the EU and elsewhere). The contract shouldn't try to remove rights that the law gives you.

BeforeYouSign can flag auto-renewal and cancellation language so you know exactly when and how to cancel if you need to.

2. Refunds and returns

What it is

When can you get your money back? The contract may offer a full refund within a short window (e.g. 14 or 30 days), a partial refund after that, or no refund after a certain point (e.g. once you've downloaded the software or opened the box). There may be conditions: unused, in original packaging, with receipt. There may also be restocking fees, admin fees, or you may have to pay return shipping.

Why it matters

Strict or short refund windows can leave you paying for something you don't use or that doesn't work as advertised. For digital goods, "no refund after download" is common but can feel unfair if the product is broken or misdescribed. For physical goods, unclear return windows or heavy fees can make returns not worth it. In some jurisdictions you have statutory rights (e.g. 14 days to change your mind for distance sales in the EU); the contract shouldn't limit those where the law doesn't allow it.

What to look for

• Refund window: How many days do you have? From purchase date or delivery date?
• Conditions: Unused? Original packaging? Receipt required?
• Restocking or admin fees: How much? Who pays return shipping?
• Exceptions: Are some items non-refundable (e.g. personalised goods, perishables)? Make sure you're okay with that.

BeforeYouSign can highlight refund and return clauses so you know your options before you pay.

3. Arbitration and class-action waiver

What it is

You may agree to resolve any dispute through arbitration—a private process with an arbitrator instead of a judge—and not to join a class action (where many people with the same complaint sue together). The contract might say something like "you waive any right to participate in a class action" or "all disputes shall be resolved by binding arbitration."

Why it matters

Arbitration is often more expensive and less transparent than court. You may have to pay filing fees and share the cost of the arbitrator. Class actions let many people pool resources and hold a company accountable for small individual losses (e.g. a few dollars each); waiving that right can make it impractical to sue for small amounts. Some jurisdictions limit or invalidate these clauses (e.g. for certain types of claims, or in consumer contracts in the EU). The clause may still appear in the contract and can discourage you from pursuing a claim.

What to look for

• Whether you're giving up court and class actions. If the contract says "arbitration only" and "no class actions," assume that's what it means.
• Opt-out: Some contracts allow you to opt out by sending a letter or email within 30 days of signing. If you care about keeping your right to sue in court or join a class action, check for an opt-out and use it.
• Location and rules: Where will arbitration take place? Which rules apply? This can affect cost and convenience.

BeforeYouSign can surface arbitration and class-action waiver language so you know what you're agreeing to.

4. Liability limits

What it is

The company may cap its liability to the amount you paid (e.g. in the last 12 months) or to a small fixed sum (e.g. $100 or the equivalent). The contract might say "our total liability shall not exceed the fees paid by you in the twelve months preceding the claim" or "in no event shall we be liable for more than $100."

Why it matters

If something goes wrong—data breach, loss of your data, injury from a defective product, or a service that fails completely—you may have little recourse beyond a refund or credit. A liability cap means the company won't pay more than the cap even if the real damage is much higher. In some places, liability for gross negligence or wilful misconduct cannot be capped; the contract may still say "our liability is limited to X." Know what the cap is and what's excluded (if anything).

What to look for

• The cap amount: What's the maximum they'll pay? Is it what you paid, or a fixed sum?
• What's excluded: Some contracts say gross negligence or wilful misconduct is not capped. That's better for you.
• Consequential damages: Many contracts exclude "indirect" or "consequential" damages (e.g. lost profits, lost data). That can further limit what you can recover.

BeforeYouSign can flag liability and exclusion clauses so you know the limits before you sign.

5. Changes to terms

What it is

The company may reserve the right to change the terms at any time. They might notify you by email, in-app message, or a notice on the website. If you keep using the service after the change, you're often deemed to have accepted the new terms. So you could be bound by rules you never read—including higher fees, new limits, or different cancellation rules.

Why it matters

Companies do need to update terms sometimes (e.g. for new features or legal compliance). But if they can change anything anytime with little or no notice, and you have no right to cancel and get a refund for the remaining period, you're in a weak position. You might wake up to a price increase or a new arbitration clause and have no practical way to object except to stop using the service and lose what you've already paid.

What to look for

• How you're notified: Email, in-app, website? Make sure you'll actually see it.
• How much notice: Do they give 30 days, 7 days, or "effective immediately"?
• Right to cancel: If you disagree with the change, can you cancel and get a refund for the remaining period (e.g. unused portion of an annual subscription)? In some places the law requires this for material changes; the contract should spell it out.
• What counts as "material": Some contracts say they'll give extra notice for "material" changes. That's better—but only if "material" is defined or at least illustrated.

BeforeYouSign can flag these and other important clauses in your consumer agreement so you know what you're committing to and what to question before you sign.