Someone Else May Want the Paper: Find Out Whether a Lender or Landlord Is the Reason You Are Buying

Some people buy a service contract because they want one. Others buy it because someone else asked for it: a lender, a landlord, a buyer, or a sale agreement. The outside demand changes what you need to read for, so find out whether one exists before you start comparing terms.

Signs the paper is asking for it

Read the loan, lease, purchase, or sale papers for words such as maintenance, service plan, protection plan, or coverage that must remain in force. A requirement may name the type of contract, the minimum term, the provider, or the proof you must give. If the paper says a contract is required but names no type, ask the other party to say what is acceptable.

Tell the kinds of demand apart

A lender may want proof that a unit is protected while it secures a loan. A landlord may want a particular unit kept working under the lease, or may ask you to hold a contract the owner benefits from. A buyer or seller may use a contract as part of closing a sale. Each has a different end point. Ask when the requirement ends: when the loan is repaid, when the lease ends, or when the sale closes.

Check who must hold the contract

Ask whether the contract must be in your name, the other party's name, or both, and whether the other party must be listed as a party or only receive notices. This decides who can end the contract and who is told if it lapses. If the answer is not in the papers, get it in writing.

Compare the contract to the requirement

A contract that meets a lender's wording may not meet a landlord's, and neither may match the term you planned. Lay the requirement beside the contract and mark each point where they differ. Do not assume a contract you already hold satisfies a new requirement until the person with authority confirms it in writing.

Check the state rules before you rely on the paper

The state pages on this site restate the rules that govern these contracts in plain words and say not read where this edition has not read a point. Check the page for your state against what the requirement asks. If the page says not read, ask the requiring party which rule it relies on.