39% of Brits Sign Contracts Without Understanding Them, Survey Finds

A new survey from law firm Weightmans has found that 39% of Brits sign contracts without understanding them. This follows from data revealing that searches across the UK for ‘how to read a contract’ have increased by 23% in the last year (2024).

This is largely due to the UK being in a digital era where online agreements and quick clicks are the norm. Following this trend, Weightmans has surveyed the UK on its relationship with legal terms and conditions and provided expert advice on how to read and sign a contract.

Key Survey findings

• Out of those surveyed, 39% of respondents admit to signing contracts they don’t understand

• Over 10% of British respondents and 20% of Northern Irish respondents confess to never reading the Terms and Conditions of contracts

• Only 30% of Brits read the terms and conditions of Credit Card contracts

• Car insurance contracts are one of the most frequently read legal documents, with 36% of Brits taking the time to review them

Two in Five Respondents Admit to Signing Contracts Without Understanding Them

Signing contracts without thoroughly understanding them and the terms and conditions is not just about individual risk; it highlights a broader issue of needing better awareness and understanding of what contracts entail. After all, knowing what you're signing up for is crucial to avoid any unwelcome surprises that might come knocking down the line.

We asked respondents: How often, if at all, do you refuse to sign a contract because you don’t understand it? Here’s what our respondents said.

• Always — 10.77%
• Sometimes — 25.69%
• Occasionally — 24.44%
• Never — 39.10%

39% of those surveyed admitted to signing contracts they don’t understand, whereas only 10% said they’d refuse to sign a contract if they didn’t understand it.

Delving into this question further we found the cities of Belfast, Edinburgh, and Cardiff emerge as hotspots for this behaviour. In Belfast and Edinburgh, nearly half (49%) of respondents admit to signing contracts without understanding them and in Cardiff this figure is slightly less at 47%.

Only Three in Ten Britons Read the Terms and Conditions of Credit Card Agreements

Our survey has revealed that Brits pay attention to some contracts more than others. We asked respondents ‘Which, if any, of these contracts have you read the T&Cs on′?

• Car insurance
• Credit cards
• Mobile phone
• Mortgage
• Tenancy agreements
• Flights
• Car Finance
• User agreements
• Hotel
• Pet insurance
• Social media
• Licensing agreements
• App usage
• Public Wifi
• Klarna
• iTunes, Apple Music, Spotify
• Computer game agreements
• Music festivals (e.g., if a headliner cancels)

The survey reveals a concerning trend in the UK: a lack of thorough review of contract terms and conditions, which could lead to significant financial and legal issues.

Only 5% of Britons read the terms and conditions when it comes to purchasing music festival tickets, which can lead to issues further down the line if acts cancel and consumers request refunds. Following this, only 9% of respondents read the terms and conditions of Klarna agreements, along with only 19% reading the terms and conditions of car finance contracts. Our survey reveals only 33% of Brits read the terms and conditions of credit card agreements and 31% mobile phone contracts. For commercial contracts such as licensing agreements, only 11% of Brits admit to reading the terms and conditions.

On the other hand, car insurance contracts receive the most attention, with 36% of Brits taking the time to go through their legal terms and conditions.

The Most and Least Understood Legal Contract Terms in the UK

Certain legal contract terms are significantly less understood by the general public. At the bottom of the comprehension scale is "Innominate," understood by merely 5.24% of respondents. Slightly better known is "Force Majeure," recognised by 13.47% of individuals, which deals with fulfilling contract obligations under unforeseeable circumstances such as natural disasters. More familiar yet still poorly understood is "Arbitration," with 24.84% awareness, which involves resolving disputes outside of court.

Our research found that the majority are familiar with several key concepts. "Agreement" is the term most understood, with 57% of participants knowing what it means. This term is essential as it indicates the mutual decisions and conditions agreed upon by all parties in a contract.

"Confidentiality" and "Termination" are also well-understood terms, each recognised by 53% of respondents. Understanding "Confidentiality" is important for recognising how private information shared between parties is protected under a contract. "Termination" refers to the conditions under which a contract can end, which is crucial for knowing how and when the obligations under a contract cease.

Only One in Five Residents of Belfast Read the Terms and Conditions of Contracts

Among the cities surveyed, Belfast, Edinburgh and Newcastle were identified as the locations where residents were least likely to engage with terms and conditions. Belfast, where 20% of its residents state they ‘never’ read the legal terms and conditions of contracts takes the top spot.

Liverpool, Nottingham and Plymouth are revealed as the cities with the most due diligence, as the lowest amount of respondents state they never read legal terms and conditions in these locations.

8 Simple Steps To Read and Confidently Sign Everyday Contracts

The process of entering a contract can often feel overwhelming, fraught with legalese and fine print that seems designed more to confuse than clarify. However, understanding what you're agreeing to is not just a matter of due diligence—it's a fundamental step in safeguarding your rights and interests.

To navigate this process with confidence, Nicola Gonnella, Partner at Weightmans shares some essential strategies and additional insights for making informed decisions when faced with a contract.

1. The importance of not rushing this process cannot be overstressed. Allocate ample time to review every clause and provision in the contract thoroughly. This ensures you are not pressured into agreeing to terms you haven't fully understood or considered. A rushed decision can lead to oversight of critical details that might have significant implications down the road.
2. Contracts can be notorious for their use of complex legal terminology, which can be a major barrier to understanding. Whenever you encounter terms that are unfamiliar, it is advisable to consult a legal expert.
3. Some sections of a contract are particularly crucial and deserve extra attention. Focus on understanding your obligations, the fees and costs involved, the duration of the agreement, any clauses related to indemnities, liabilities, termination of the contract, and the penalties that might be incurred for early termination or breach of the contract.
4. Seek clarification. If any part of the contract remains unclear, or if you need further explanation on a specific clause, seek clarification from a legal expert.
5. It's not uncommon for contracts to undergo several rounds of negotiation before the final version is ready for signing. Make sure that any verbal agreements, modifications, or last-minute changes discussed are accurately reflected in the written contract. Signing a document that does not fully capture the agreed-upon terms can lead to disputes and misunderstandings.
6. Consulting with a legal expert can provide an invaluable layer of scrutiny. They can identify potential pitfalls, suggest modifications for your protection, and ensure that the contract aligns with your best interests.
7. Once signed, ensure you have a copy of the contract for your records. This document serves as your proof of agreement and is vital for reference in case any questions or disputes arise. Keeping organised and accessible records of your contractual agreements can save considerable time and effort in the long run.
8. Remember, signing a contract is a formal commitment. Fully understanding the terms and conditions before affixing your signature not only protects your interests but also fosters a more transparent and trustworthy contractual relationship. 

Methodology

The research was conducted by Census Wide, with 2,000 respondents, who are aged 18-64.

All data is correct as of 02/2024.

Censuswide complies with the MRS Code of Conduct and ESOMAR principles.