Contracts are an essential component of effective business management and development. Savvy business owners recognize the value of contracts but often explore ways to reduce the cost of obtaining them. In some instances, business owners attempt to create their own contracts by using templates available online.
However, creating your own contract is fraught with many risks. As they always say, what you do not know can, in fact, hurt you. The following are examples of the potential risks you face when you choose the do-it-yourself (DIY) route.
- The Contract May Leave Out Key Provisions. Creating your own contract in an attempt to save money can run the risk of unintentionally leaving out key legal terms and clauses that protect your interests as a business owner. Contracts created with online templates are often overly broad or vague. Attorneys, like myself, have the experience and resources to craft contracts that include the most important provisions to protect your specific business.
- Your Contract Could Be Unenforceable. Failing to understand the legal landscape can result in creating a contract that, when litigated in court, is found to be unenforceable. For example, specific laws vary by state. As a result, a contract that is appropriate in one state could fail in another. For instance, employment agreements with non compete provisions may be enforceable in Texas but unenforceable in California. In this case, the individual who uses a Texas contract for an employment agreement in California could be left with, at a minimum, a clause that will be thrown out, or quite possibly an entire contract that is useless.
It is important to have a contract that can be enforced in case any unforeseen circumstances arise. A DIY agreement could become unenforceable because of changing laws or changes agreed upon between parties which would make it inconsistent with your business’s jurisdiction, among other issues. Lastly, there are many different legal rules describing what conditions must exist for contracts being enforceable; you need an attorney if you want them fulfilled specifically as they apply to the type and nature of the transaction at hand.
- You Could Create an Accidental Legal Obligation. Contract drafting is a very deliberate process and it should be taken seriously. The inclusion or exclusion of certain terms in your contract could unintentionally create legal obligations for you, which means that even if this was something unintentional on behalf of the drafter – they’re still legally responsible because there are so many details hidden within boilerplate language often found in templates today!
These various risks could culminate in increased liability, decreased protection, and expensive legal fees to remedy these mistakes. The limited savings of a DIY contract are easily outweighed by the time and money that will be spent if any of these risks become reality in your business. As the well-known adage goes, “Prevention is better than cure.”
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We understand the challenges businesses face and can assist you in obtaining contracts that protect your interests. When you schedule an appointment with Schmit Law Firm, you can rest assured knowing that you are working with dedicated professionals invested in helping you and your business succeed.