This post is part of our “Industry Insights” series, where our Yale Law School intern, Alexandra McKinney, discusses issues that are important to the small businesses she has interviewed in Connecticut. Today’s post is about how businesses can use form contracts wisely.
Google allows us to access almost any document or piece of information we could imagine, with the click of a button. Tomorrow’s weather for Melbourne, Australia? A copy of a bill the Senate just passed? Photos of the Obamas’ new dog? A quick online search will turn up endless results. But can an internet search really churn out a contract perfectly suited to your small business’s needs without the help of a lawyer?
The answer is yes and no. While it may be ill-advised to download a contract and use it without consulting a lawyer, you can ask a lawyer to review a contract you found and edited—thereby keeping your legal costs down.
Despite knowing that they should have lawyers draft, or at least review, their contracts, many of the small business owners I interviewed in industries ranging from photographers to caterers to personal trainers admitted that they adopted ready-made contracts available for free online. Most of the time, these small business owners began using the contracts without consulting a lawyer—after just reading through them and making their own changes.
So, what can go wrong if you simply find a contract online, read it over, and use it in your business?
First, you can’t be sure that this contract was actually drafted by a lawyer. Certain words and phrases interpreted one way in everyday conversation may mean something entirely different in the eyes of the law. Lawyers are trained in this legal language, and ensuring that your contracts are drafted and explained to you by a lawyer helps you make sure that your contracts are saying exactly what you want them to express.
In addition, contracts should take into account your business’s unique qualities and intricacies. A lawyer who understands your business can use his or her expertise to pinpoint potential problems your business might face and help you prevent these problems through your contracts. For instance, you may not think to put a clause in your contract about who is responsible if your memory card is damaged after photographing a client’s wedding or that you reserve the right to substitute one brand of chocolate for another in a client’s catering order, but a lawyer certainly will. These clauses may or may not be found in generic contracts found on the internet, since they are particular to individual businesses, not just industries. This is why it is important to find a lawyer who will understand your business and can create a contract that works just for you.
Fortunately, even if you have been using contracts formulated from an online template, hiring a lawyer to revamp your contracts does not need to be expensive or time-consuming.
Instead of redrafting a contract from scratch, lawyers can look over contracts you have drafted yourself to make sure that you’re not misusing legal phrases or forgetting to address important contingencies. Although some complicated transactions or complex business models may require a more complete overhaul of a contract, for the most part, lawyers can serve as a final pair of eyes to make sure that your contracts will work the way you want them to should a legal issue ever arise.
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