Diritto commercialeContenzioso commercialeNotizieWhy Shouldn’t You Draft Your Own Contracts?

When drafting a contract yourself you may have a general idea on what needs to be included in its terms but we find clients who come to us with contractual issues have on many occasions turned to the internet to find an example contract as a starting point.

It can be an absolute false economy if you choose to do this.

This can cause you, so to speak, a world of pain for a number of reasons, including:

1. you don’t know if the contract was drafted by a reputable person or that it is applicable to the laws of State you live in;
2. that the Internet contract simply doesn’t apply to the situation or terms you seek to have recorded
3. it may be unclear which jurisdiction applies to the document, that is, the contract could be using laws of another State or country. Many internet contracts are USA based; and
4. laws may have changed and the contract has not been updated to reflect these changes.

The examples you find online should be treated the same way you treat Wikipedia when doing research: it may be a good start but should not be the sole resource you rely on.

Believe it or not it is often more cost-efficient, and safer, to have a lawyer draft your contract.

Case Studies

Client wants us to review a contract

Person A decides to save money by drafting a short 4 or 5 page service agreement themselves and then engage us to review and amend to make the contract “water tight”.

We start our review and amend a large majority of the first page. At this rate most of the agreement will be our own work and we are going to spend as much, if not more, time to review this contract than if we had drafted it ourselves. The adage making a pig’s ear into a silk purse is an example where re-writing a poorly drafted contract occurs here.

We tell Person A this and they agree to have us draft a whole new service agreement. This also places a time pressure on the client where Person A is trying to come to terms of agreement with the party it is contracting with and this delay and re-write could cost Person A in terms of lost revenue.

Client has a contractual dispute

Person A again drafts a short 4 or 5 page service agreement themselves but does not engage us, or any other lawyer, to review the contract before they utilise it in a business situation.

All seems to be going well until Person A has a disagreement with the other party to the contract, Person B. Person B terminates the contract immediately, requests a final payment for their work and leaves false negative comments and/or reviews on social media both anonymously and through friends. As a result of the negative publicity Person A loses clients and, therefore, money.

We review the service agreement and ultimately determine that they had no adequate provisions to protect them from such loss and it would be both difficult and costly to persuade a Judge that Person A is entitled to damage in accordance with the terms of the contract. Fortunately, we are able to write to some of the social media companies and have the false comments and reviews removed from their site but this will not win back the lost clientele, loss of profit or ongoing work.

Person A is understandably upset about their chances and decides not to proceed with a claim against Person B, but they take the opportunity to review all their systems and have us draft a new service agreement that will give Person A better protection in future. Again it is a situation that could have been avoided entirely had Person A engaged a lawyer from the outset.

So to save yourself the additional costs of having your contract amended and the headache, cost and stress of litigation in future, have a professional draft your contract.

If this article has made you think about having a professional draft or update one or more of your contracts please reach out to us. At first instance we are happy to discuss your matter.

Articolo scritto da Ashleigh Boyce del nostro ufficio di Brisbane.