What Exactly is a “Contract?”
Before addressing why you should have a lawyer draft a contract for you, it would be helpful to discuss contracts generally. Quite simply, a contract is a promise, or set of promises, which the law will enforce. See Pollock, Pollock’s Principles of Contract, xliv, 610 (13th ed. 1950). With a handful or specific exceptions, there is no requirement that contracts be in writing.
People are often surprised to hear that oral contracts are just as enforceable as written ones. For example, if your neighbor told you he would pay you $100 to mow his lawn, and you then mow his lawn, that would make a valid contract. If your neighbor then refuses to pay you, he would be breaching his promise to pay you $100.
However, it is often best to get an agreement is writing simply because it is much more difficult, and costly, to prove the existence and terms of a verbal contract than it is a written one. In the above example, if you had to go to court to get the $100, your neighbor could say he offered $10 not $100 or he could conveniently deny saying that he would pay at all.
Contracts are a way for two sides to formally memorialize their negotiated deal. In this sense, the contract is a business document. It should address terms like prices, delivery, and timetables. It provides a common reference point for the two sides. However, the contract is also a legal document. The two sides are making a legally binding agreement the law will enforce. There are legal consequences for the side that fails to keep its promises. The contract must not only memorialize the agreement, but it must be written in a way that makes the agreement enforceable in court.
To write an effective contract, you need to understand that it must accomplish several different things. The contract must protect your interests so that if there are any issues later, you have the law on your side. The contract must accurately describe not only the deal but also what each side is exactly promising to do. At the same time, the contract must be written in a way that the other side will be comfortable signing it and moving forward with business. Contracts that are completely lopsided and unfair can be challenged in court.
Trust—the fundamental problem contracts were designed to solve. Since contracts are legally enforceable agreements, it makes it possible for two strangers to enter into a business relationship because they can rely on the knowledge that if the other side fails to live up to their end of the bargain, the wronged party can turn to the law to be made whole.
Drafting a contract is almost like deciding the rules that will apply to the two parties signing it. It is critical that contracts are drafted so that they will protect you in the event that the other side fails to keep their commitments. When the original contract was poorly drafted, a breach of contract lawsuit usually ends badly for the person who was screwed over in the deal.
However, the law is complicated and this is doubly true with contract law. Courts have built up a system for interpreting different contractual clauses over hundreds of years. These legal precedents are known as “common law.” Further, states, including Florida, have passed statutes that govern certain aspects of contracts by altering, but not completely eliminating, common law. There is almost always an exception, and an exception to the exception, and an exception to the exception’s exception all of which may or have altered by some seldom heard-of statute.
Why Have a Lawyer Draft a Contract?
There is no requirement that lawyers draft every contract and, like other areas in the law, you may be fine editing a form contract to suit your needs. However, if there is any money at stake, not having a lawyer properly draft a contract is tantamount to rolling the dice.
Having a lawyer draft your contracts gives you three distinct advantages:
- Lawyers give you an invaluable outside perspective on the terms of the deal.
In addition to their legal skills, contract lawyers are also detailed oriented and excellent problem solvers. Having a lawyer prepare your legal documents gives you an outside perspective on your business dealings. Sometimes the people involved are too close to the negotiations to notice potential problems with the structure of the deal.
- Lawyers will often identify potential liability issues helping you avoid the major pitfalls of hastily self-written form contracts.
Lawyers are not only able to give you feedback on any potential pitfalls of the deal, but they can also make suggestions on ways to fix the problems. Sometimes, just the way a concept is worded, by a lawyer, in the contract can turn a potential liability into a form of protection for your company. Because a lawyer is not invested in the outcome of the transaction, they are able to give useful, unbiased advice to protect your legal rights and interests.
- Lawyers make sure the end product is a legally enforceable agreement.
Contract lawyers have a specialized knowledge. They have seen firsthand why the exact language used in a contract matters. It might seem silly but something as minor as the placement, or misplacement, of a coma can make alter the way a particular clause in the contract might be interpreted by a court. When there are only two sides in a deal and things go south, there can only be one winner and one loser.
When it comes to contracts, “close enough” is not good enough. The contract must be precise if it is to give you the maximum protection of the law. Because a contract has several technical legal requirements, if your written document leaves out a single key element, you will be left with something that describes the intentions of the parties, but is not legally enforceable. It leaves you unprotected in the event the other side fails to make good on their promises.
When you hire a contract lawyer to draft a legal document you are getting the expertise of someone who understands how the courts will interpret and enforce the different terms of a contract. Having a lawyer draft your contracts is the best way to make sure that a court will view your contract the same way you do. Contract lawyers add stability and predictability to financial and personal agreements.
Dangers of Using Generic Online Form Contracts
There are many dangers that come from writing your own contracts without the input of a contract lawyer. One of the functions of a contract is to prevent future disputes between the two sides. This requires that the contract use precise language to describe the duties and responsibilities of both parties.
When people create their own contracts, they often do not realize how vague their language is. For example, one common contractual term is “timely.” If timely is not defined in the contract, this one word can lead to expensive litigation. One side may feel that a delivery within 30 days is “timely” while the other side may face economic ruin because it understood “timely” to mean within a week. This vague term could land the two parties in court facing an uncertain outcome.
Another danger of DIY contracts is that they almost always fail to adequately address a myriad of potential issues that might come up, particularly in the event things do not go according to plan. Most people and businesses write contracts as if nothing will ever go wrong between the two parties because the deal is too important. Contract lawyers have seen enough deals go bad that they draft contracts to address common issues in commercial relationships.
When something bad happens down the road and the parties have not addressed it in their contract, one side usually gets it in the bum. Another commonly seen issue with self-drafted contracts is that they may not be enforceable at all. Additionally, they may contain provisions that are enforceable in one state, for example, California, but not enforceable in others, for example, Florida. A contract lawyer will ensure that all of the essential elements for an enforceable agreement are present in the document.
It is completely understandable that many people and businesses want to save money on legal costs and succumb to the temptation to grab a few form contracts off Google. However, the cost to have an attorney, like Gulisano Law, properly prepare a contract is likely surprisingly cheaper than you might think. Moreover, the cost to litigate a contract dispute over poorly worded clauses will certainly cost much more than having a professional write the contract in the first place.
Dangers of Using Contracts from Online Services Like LegalZoomy
Some businesses pass on the freely available forms on Google and are instead tempted to try LegalZoomy, or the like, to download ready-made contracts that only need to be “tweaked.” These online contract services claim that the documents you buy and download were created by lawyers. Assuming the company is reputable, and on the internet it is like a needle in a haystack, these contracts come with some serious drawbacks.
These online contracts are boilerplate forms, which may not have been drafted with Florida in mind. A lawyer who has never even practiced contract law in Florida may have created the template you are thinking about downloading. This is a problem because not all states have the same rules and laws when it comes to interpreting different contractual terms.
Another issue is that these templates do not take into account the specifics of your situation. No two people or businesses are exactly alike. If you are using a form contract, you may find yourself in serious trouble when a contract dispute arises. It is during contract disputes and resulting litigation over form contracts that people and businesses learn that it is much more expensive to edit a form contract than it is to have one drafted correctly in the first place.
Nor are these contracts tailored in any meaningful way to the specifics of your agreement. Instead, they usually spout a bunch of flowery legal gibberish that older attorneys or lay people think are significant. The modern trend in all legal writing, including contracts, is to write in plain, clear, and easily understood terms.
You should not have to enter terms of the contract in Google to translate their meaning into English. When you hire a lawyer to draft a contract you are getting a custom document that was drafted specifically for your situation and to protect your specific interests.
Gulisano Law Contract Drafting and Legal Document Preparation
If something is important enough to create a contract, you should invest in making sure the contract itself actually protects your interests. Experienced contract lawyers understand that when drafting a contract for their clients, they must create a legal document that serves both the business and legal needs of the person or company.
Gulisano Law has written thousands of legally binding contracts, in plain language, for a variety of personal and business situations. We use our extensive contract law experience to draft contracts that serve the purposes of your business, seek to avoid disputes, and in the event litigation becomes necessary, will be enforceable in court.