Understanding Service Agreements Before You Sign
What to look for in terms of service, subscriptions, and consumer agreements.
Service agreements—for apps, subscriptions, gym memberships, streaming services, or one-off purchases—often feel like a wall of text. Many of us scroll to the bottom and click "I agree" without reading. But these documents define what you're paying for, when you can cancel, and what rights you're giving up. Taking a few minutes to understand the key sections can save you money, avoid surprise charges, and protect you if something goes wrong. Here's what matters most and how to find it quickly.
What you're agreeing to
Before you sign or click accept, the agreement should make clear what you're actually getting. Too often, the language is vague enough that the company can later say "that wasn't included" or "we changed that." Focus on these areas.
Scope of service
What exactly is provided? For software or apps: Are updates and bug fixes included? Is support included, and if so, is it email-only or do you get phone or chat? For subscriptions: How many devices or users are included? Is there a usage cap? For physical services: What's in scope vs. extra? Vague phrases like "reasonable support" or "standard features" can lead to surprises when you need help or expect an update. Look for a clear description of the core service and any limits.
Fees and renewals
Is the fee one-time or recurring? If recurring, is it monthly, yearly, or something else? When exactly do you get charged—on signup, on the anniversary date, or at the start of each period? Auto-renewal is very common: at the end of each period, the company charges you again unless you cancel. The problem is that many people forget, and the cancellation process is sometimes buried. Look for: (1) how to turn off auto-renewal (in-app, email, phone, or mail), (2) how much notice you must give (e.g. 30 days before the next charge), and (3) whether you get a reminder before they charge. In some jurisdictions, the law requires clear disclosure of auto-renewal and an easy way to cancel; the contract should still spell it out.
Cancellation and refunds
Can you cancel at any time, or only at the end of a billing period? If you cancel mid-period, do you get a partial refund or do you lose the rest of the period? Are there restocking fees, admin fees, or "cancellation fees"? For physical goods, what's the return window and who pays for return shipping? Read this section before you pay—especially for annual plans or large one-time fees. Some companies offer a short trial or money-back period; note the deadline and any conditions (e.g. must cancel within 7 days, no refund if you've used more than X).
Red flags
Some clauses are common in consumer agreements but can significantly limit your rights. You may not be able to negotiate them (especially with large platforms), but you should know they're there.
Arbitration and class-action waiver
Many agreements say that if you have a dispute, you must resolve it through arbitration—a private process—rather than going to court. They may also say you cannot join a class action (where many people with the same complaint sue together). That can limit how you enforce your rights: arbitration is often more expensive and less transparent than court, and waiving class actions means you can't pool resources with other customers. Some jurisdictions limit or invalidate these clauses (e.g. for certain types of claims or in certain countries); the clause may still appear in the contract. What to look for: whether you're giving up court and class actions, and whether there's an opt-out (some contracts allow you to opt out by sending a letter or email within 30 days—if you care, do it).
Liability limits
The company may cap its liability to the amount you paid in the last 12 months, or to a small fixed sum (e.g. $100). That's common and means that if something goes seriously wrong—data loss, breach, injury from a defective product—you may have little recourse beyond a refund or credit. In some places, liability for gross negligence or wilful misconduct cannot be capped; the contract might still say "our total liability shall not exceed X." Know what the cap is and what's excluded (if anything).
Changes to terms
The company may reserve the right to change the terms at any time. If they do, do they notify you? How—email, in-app popup, or just a note on the website? If you keep using the service after the change, you're often deemed to have accepted the new terms. That means you could be bound by rules you never read. Look for: (1) how much notice they give before changes take effect, (2) whether you can cancel if you disagree and get a refund for the remaining period (where applicable), and (3) whether they highlight material changes (some laws require this). If the agreement says "we can change anything anytime" with no notice and no right to cancel, that's a red flag.
Practical tips
You don't have to read every word, but you should locate the sections that affect your wallet and your rights.
- Use search (Ctrl+F or Cmd+F) for: cancel, renew, refund, arbitration, liability, change, termination. That will jump you to the relevant paragraphs.
- Note key dates: When does the trial end? When is the next charge? When do you need to cancel by to avoid the next period?
- Save a copy: Download or screenshot the terms (or the key pages) when you sign. Companies can change them later; having the version you agreed to can help if there's a dispute.
- BeforeYouSign can summarize and flag these sections in your agreement so you know what you're committing to before you sign. Run the document through, then focus your reading on the parts that matter most to you.