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Pitfalls of drafting your own contract

If you are in need of a contract, in today’s age of the Internet, you might consider simply finding a sample or form contract online to save costs and cut corners. However, if you do not draft a contract wisely, you may end up paying more for litigation in the end than for legal counsel to draft your contract at the outset. The following are some reasons why drafting a contract without legal counsel could prove to be a mistake: 

Precision versus ambiguity

At the time of drafting, you may have a clear idea in your head of the terms and definitions between you and the other party. However, to outside third parties, the contract and your intent may read less clearly. Keep in mind that in the event of a dispute, you may find yourself in court. Thus, if your contract can be interpreted differently and your adversary is arguing for that different interpretation, the court could adopt that adverse interpretation against you. Attorneys are usually well-versed with contracts and how courts or even adverse attorneys may try to interpret particular provisions, so getting an attorney to draft terms precisely and unambiguously can prevent a possible misunderstanding or intentional conflict later.

Addressing foreseeable or seemingly unforeseeable events

Attorneys try to prevent as many consequences as possible. Thus, an attorney can address as many foreseeable or seemingly unforeseeable events as possible, based on experience and knowledge of common types of issues and contract disputes. While you may be optimistic that your contract will be completed without complication, particularly when dealing with a known and trusted party, disputes can and do arise. You want to ensure your contract provides for how to handle these disputes, in what forum, and the possible remedies and consequences available to each party. Thus, in the event an issue does arise, not only would you already have agreed to the possible outcome, but the other party should also acknowledge this outcome and be less likely to try to litigate the issue where the contract would evidence that party’s agreement to such an outcome.

Using applicable and understandable terms

A lot of boilerplate contracts include provisions that you may think is necessary to a contract. However, many people do not actually understand the meanings and implications of boilerplate, or even non-boilerplate contract terms. If you do not know what a term means or how a court may enforce it, how do you know your contract should include it or that it will not hurt you in the end? Also, how do you know the court in your particular jurisdiction would uphold the clause? Courts and laws can vary between states. A term that may be enforceable or beneficial in one state may not be in yours. Thus, waging a gamble on including certain terms may not pay off in the end, so proceed cautiously when copying other contracts’ terms. Feel free to also see my page on Contracts.