Using Standard Form Contracts May Hurt Your Business

As a small business owner, you have probably developed a number of time-saving strategies.  Using standard forms of documents, such as invoice templates and form letters, has probably allowed your business to accomplish a lot in a limited amount of time. Contracts, however, are too important to assign to a one size fits all template; of the many business tasks that you can automate, business contracts are not among them. When drafting a contract for your business, or when another party offers a contract in order to agree to do business with your company, you should contact an attorney who practices small business law, such as Stephen Welle, before you sign.

Every Word in a Contract Counts

If you have standard contracts saved on your computer, such as a sample agreement for suppliers and a sample independent contractor agreement for freelancers, that is fine. No one is asking you to write every single contract from scratch. Still, you should not send a contract to the other party without first modifying it to fit your specific circumstances. You might even need to add some clauses to the contract. Some elements of a contract seem like unimportant “fine print” that you can just skim, but if a legal dispute arises in relation to the agreement, these little details could decide the outcome. Make sure your contract includes answers to the following questions.

  • Which courts have jurisdiction to resolve disputes relating to the contract? This is especially important if the parties to the contract are based in different states or different countries.
  • Which party in a lawsuit related to the contract is responsible for paying court costs and/or legal fees?
  • Does the contract automatically terminate or automatically renew? If it automatically renews, what must the parties do to cancel the renewal? If it automatically terminates, what must they do to renew it?

Discuss All the Details with an Attorney

Stephen Welle is used to thinking like a small business lawyer. When he reads a clause in a contract, he thinks of situations that might arise and how the contract, in its current wording, would dictate that you must respond to them. Sometimes simply changing the word “must” to the word “may” can make a big difference.

It may sound time consuming to go over every detail of every contract with an attorney, but it is worthwhile. Big corporations do it; some of their employees are lawyers whose job duties consist almost entirely of drafting and reviewing contracts. Spending the time to review a contract with an attorney before you sign can save you the time and money that a later legal dispute would cost you.

Contact O’Keeffe O’Brien Lyson Foss About Business Contracts

Your legal rights in a business agreement are important, and you can unintentionally waive them if you simply copy and paste a sample contract. Contact O’Keeffe O’Brien Lyson Foss in Fargo, North Dakota or call 701-235-8000 or 877-235-8002 to review your business contracts.