Business owners often wonder if using an online contract template agreement for their business is a good option. Is it better for them to write their own agreement using an online service or is it better to have an attorney prepare the agreement?
As cost-effective as using an online template might appear, there are actually many situations where using an online form can go wrong. For example, we’ve seen agreements where the owner’s name was used instead of the business name so the owner was sued personally. Another online agreement contained a clause that automatically renewed without the business owner realizing it was going to happen.
Instead of trying to cook up an agreement from an internet form, business owners can protect themselves by having an attorney prepare, or at least review, their agreements. There are a number of advantages to using an attorney that those internet forms just don’t offer. It will be well worth the expense to protect you and your business properly.
Liability Costs – Online Contract Templates
The first reason you need your contract prepared by an attorney is that the potential liability when something goes wrong can significantly exceed the face dollar amount of the contract. It might cost your business more than you received under the agreement. Service interruptions, delays, and more could end up costing a lot of money. Don’t think that just because it is a small dollar amount on the contract that it is safe to skip having it reviewed by an attorney.
Experience and Expertise
The second reason to have your contract reviewed or prepared by an attorney is you get the advantage of their experience. An attorney is going to see things that you don’t see. That isn’t to say you aren’t a savvy and capable business owner, it is more a matter of expertise.
If I go to a dentist they can take one look at my teeth and my x-rays and know what has been going on with my teeth since I was a child. When I take my bicycle into the shop the mechanic can tell where I’ve been riding, what I’ve been doing, how I’ve been over-using my back brakes, etc. Their experience in that specialized area lets them see things that the average layperson might miss.
Similarly, it works the same way with an attorney and a contract. While you read a contract and you see some things, an attorney will see a lot more. They can see the pitfalls, the things that can go wrong, see where you could end up in real trouble. They can see opportunities that could improve your leverage or your situation in the deal.
An attorney with experience litigating contract disputes in court is even more beneficial. Attorneys with litigation experience have first-hand knowledge about what language in the contract drives the outcome of a lawsuit. It is an extra benefit if your business attorney has experience resolving contract disputes in the courts.
An attorney can customize your agreement to meet your business needs. Having an attorney prepare your agreement, as opposed to using an online service, means it will be specific to your business’s situation and location. Laws vary by state or you might be working in multiple states but where you do business matters.
Finding the right agreement for your situation, your business, and your location from an online service can be tricky. The form recommended might be totally different than what you actually need. You can end up trying to get a square peg into a round hole because you have the entirely wrong type of agreement from the start.
The fourth reason you should have your contract reviewed or written by an attorney is that it is a great way to start a relationship. It won’t cost you a fortune to have your customer or vendor agreement looked over while you get a chance to see how things click between you and the attorney.
It is kind of like when you’ve moved to a new town and don’t have a primary care physician. It is a little too late to find one when you are sick or injured. You’ll find yourself getting told that the doctor has a two-month waiting list for new patient appointments. If you’d already established a relationship you could have been seen the same day.
Having an established relationship with an attorney is similar. Starting a relationship with an inexpensive contract template review means that next month when you have that question, you can pick up the phone and call your attorney. You have someone who knows who you are, knows what your business does, and can answer your questions in a knowledgeable manner.
Over the long haul, having all of your business agreements prepared and reviewed by an attorney is the best way to use your money. You are going to save multiples of that expense making the investment to get your agreements done right by a professional.
Imagine what you could do with that $20,000 you didn’t have to pay because you missed the auto-renewal clause built into that internet agreement. Avoiding just one problem like that can save you a lot compared to the cost of getting all your agreements prepared and reviewed by an attorney.
You take your business seriously and you should take entering into any agreements seriously as well. Entering into a contract is a legal obligation, it should be treated seriously by you as a professional just like everything else you do in your business. As a business owner, it is up to you to decide if the agreements that you enter into with your vendors, your customers, your investors, your partners are worth doing right.
If you have any more questions about the process for reviewing a contract template or the advantages of having an experienced business attorney write your agreements then please give us a call. We’ll be happy to speak with you about this topic and help you ensure that your business is on solid legal footings as it grows.