The Expert Podcast

So how many times a day or week or a month do you sign some agreement whether it's maybe your cell phone agreement uh maybe it's something online to order an app and it just says you know you agree to the terms and conditions and you just sign it how often do you look at the terms and conditions well it may be important to take a look at some of the details because there may be things that are creating risk or liability for you that you're not aware of we're going to look at one example today it's not necessarily one that is the only thing to be aware of but it is something that's an example of the type of liability that you may be taking on every day without knowing it.
Remember we're not attorneys we're not giving you legal advice these are just consumer suggestions to be aware of what you see on the screen comes from a vehicle rental car agreement car rental right doesn't matter what the rental company is most of them have similar terms and conditions but in this agreement you'll see it says prohibited use and termination of right to use it says Renta agrees to the following limits of use shall not be driven be driven by any other person than the renter or authorized driver okay that's fair enough when you rent a car they want to make sure that they know who's renting it it's either you authorized driver usually a spouse you're not going to be handing off the keys to somebody else fair enough.
You don't want to use it for hire you don't want to be used for any illegal purposes or fraudulent or Reckless manner in a race or speed contest okay fair enough they don't want your their car you know drag racing on the Strip or using it for trafficking narcotics or anything illegal and that's a reasonable thing carry passengers in excess of the number of seat belts sure that makes sense uh if you have five people in the vehicle and only four of them can be belted in that's going to create risk.
Remember this is a prohibited use and termination of right to use meaning that if you do any one of these things you're right to use the vehicle is terminated at that point the Rent-a-Car company can make the argument that if you did this and then even later you were driving and something happened you terminated your rights at the time you did it so even if later on you weren't doing one of these things anymore you could have liability we'll talk about what that liability might be on the rental contract but look here's the one that that we're zeroing in on number nine says the vehicle shall not be driven on an unpaved Road or off-road.
Well off-road makes sense you don't want to go four-wheeling with somebody's minivan you don't want to you know take a Toyota Corolla you know in the mud box but what about an unpaved Road many people live on unpaved roads many times you might have to go down a dirt driveway to get to even a business in some areas you may not have been aware that driving on an unpaved Road is prohibited and it's also terminates your right to use in fact the rep at the agency might also not even be aware of that in fact in this case you know we specifically asked the rep is it okay if I drive this to my friend's house who lives on a dirt road yeah no problem we don't restrict where you drive that was their words but it was verbal doesn't matter that they said it because it says also right in the contract that it cannot be altered by Oral agreement so just because they said it it doesn't change anything about your responsibilities.
So back to the conditions vehicle shall not be driven on paved Road well what happens if you drive it on unpaved road well first of all if anything happens while you're driving on that unpaved road you don't have any protection even if you've purchased the collision damage waiver doesn't count look at that in a minute you also may not have coverage on your insurance because your insurance policy even if it covers your vehicle on a dirt road it may not cover a vehicle that's used in violation because technically you don't have a right to use it your right to use has been terminated if you drive on a dirt road meaning that your insurance doesn't cover you on a vehicle you're not supposed to be using which technically you're not.
So let's say God forbid you're driving a rent-a-car on a dirt road somebody pulls in front of you and you crash into a tree twenty thousand dollars damage call your insurance company hey I damaged the car hey we'll look into it they reject the claim you have to write the check and there's other damages that go along with a Rent-A-Car claim that you may not be aware of too let's take a look at those in addition to the damages you also have to pay of diminished value 10 percent over and above the repair costs so if it's a 20 000 damage it's another 2 000 of diminished value your insurance company might not pay that even if there is coverage in place.
But it gets worse they tell you right here that there may be an electronic data recorder which is technology for the purpose of tracking the vehicle they're going to record the use of that vehicle so if there's an accident with the vehicle they can go back and see if you use that vehicle in a prohibited use even before the accident if you drove it on a dirt road two days ago and then it was crashed two days later they might say accidents on you you have no insurance right again these are legal questions you might want to check with an attorney but I guarantee you if something happens the other party to this contract is going to interpret it to their favor not to your favor.
Did you also know that when you rent a car you give them a power of attorney meaning that they can sign your name to get back money from your insurance company or also to endorse your name or liability claims so you can be forced by a power of attorney with the Rent-a-Car company to sign your name to take liability from them and put it into your name and once again here we have the paved Road claws you can buy a damage waiver which absolves you of any liability but it will be invalidated if you use it on an unpaved Road or off-road and all the no other things if you're in a criminal act racing Towing pushing that kind of thing it's not valid also to transport chemicals corrosives or hazardous materials what if you get gas in a gas can in the back of your car does that invalidate it maybe something to look into.
You also need to return the original keys and owner's key tag identifying vehicle you know when you rent a car there's a key and there's a little paper tag that says 2020 Honda Civic whatever it is if you don't return that and you fail to return that key well guess what according to this invalid not just the key but the key tag so what can they do if they think you owe money well if a credit card or debit card is presented as a means of payment which obviously it is the renter authorizes owner to bang that card for any billing that you refuse to make payment on if the owner initiates a charge that is Dishonored the renter authorizes the owner to initiate a charge without further authorization so they can go behind your back and charge your credit card for anything that they say that you owe money for which are all these things expenses taxes fees late charges many many other types of fees.
Look this is not an indictment of any one particular Rent-a-Car company this is designed to give you an idea of what you're signing up for many times when you're just signing that authorized agreement or I agree to these terms and conditions without knowing what's in the terms and conditions you might be setting yourself up for failure what happens if you have a fifty thousand dollar car rent a car which many cars are worth fifty thousand these days and it gets stolen somebody steals the car if you don't adhere to all these terms didn't drive on a dirt road you have the key you have the tag you didn't leave it unlocked you might be on the hook to write a check for fifty thousand dollars because the Rent-a-Car company is gonna want their money your insurance company might not pay it.
In addition you might be liable for what's called loss of use many Rent-A-Car companies have in their contract a term that is if that car is not available for them to rent out let's say you pay eighty dollars a day for a Rent-A-Car and it is unavailable for let's say 40 days okay well eighty dollars a day for 40 days that's more than three grand attacked on top of everything else your insurance company may not pay for that or they might consider it excessive if your insurance company pushes back or disputes it the Rent-a-Car company is not going to try to negotiate with them they're just going to say well fine then you pay it and you deal with your insurance company.
So be aware when you sign terms and conditions it's going to be in the favor of the vendor that's providing the contract which again we're not disparaging any one particular company it's just that's how contracts are so when you're signing a contract for something that might seem important you want to maybe look into it you think when you're renting a car well it's 80 a day how much liability do I have well that contract is not about eighty dollars it's about the value of the vehicle and liability you may think you have insurance for it but there's a lot of things that can exclude you from coverage on your insurance.
It's not worth losing sleepover or getting scared over it's just worth reading about things obviously if you can do this in advance you don't want to be sitting in a rental car place while everybody's loading up the car reading contracts for 30 minutes maybe get a copy in advance anytime you're looking to get involved with some complex consumer purchase or service so you know what your obligations are and what your liabilities might be.