Dangers of Using Template Forms & Contracts Found Online As-Is
Legal Self-help in the Internet Age
The proliferation of self-help websites has certainly not left the legal sphere untouched. More than ever, it is tempting to use online templates, contracts or forms in an attempt to reduce the legal costs of business, and of life. To this end a variety of websites offer free or low cost access to a wide array of legal documents. They are literally a click away.
Just ten years ago there was little option but to approach a business litigation attorney in dallas Texas to help you form an LLC, draft an employment contract, register your patent or other intellectual property, execute your last will and testament, and a whole host of other business functions that had a legal aspect to it. Today, however, is the age of skipping the doctor’s appointment in favour of the WebMD website, favouring online shopping to the traditional grocery store and, in keeping with that trend, forfeiting professional legal advice in favour of template documents you can source online.
Online Buyers Beware
There is no shortage of options. Companies like Legal Zoom and Rocket Lawyer offer such a wide range of standard legal documents that you may be tempted, upon viewing their website offerings, to think you have been liberated from all attorneys’ offices for the remainder of your days.
While there is no doubt a benefit to easier access to these standard form documents, an over reliance on them comes with significant risk. In a Forbes report, Brian Draves, general counsel at Techstars, acknowledges that an online template may provide a useful starting point, but warns against finalising contracts on that basis. Ultimately, a small business lawyer should be sought after to ensure that the specific terms and needs of your situation are properly set out in the document, and that you are fully protected in the event that things turn sour. Similarly, some seemingly standard terms may be harmful to your goals, and may require the sharp and knowledgeable eye of a legal practitioner who can properly advise you of the full implications of what you are looking to sign.
You Don’t Know What You Don’t Know
In many cases, specific types of legal documents are subject to legal rules or may contain standard terms which you may want to specifically exclude and which, without an attorney’s input, may easily be missed.
As the law firm Heritage Law puts it, “you don’t know what you don’t know”. One hazardous example of this is the contra proferentem rule– this old latin legal principle holds that, when there is ambiguity in the meaning of a contractual term, that term must be interpreted against the interests of the party responsible for preparing the agreement. According to this rule, if you download a standard template agreement, make some of your own edits, and place that in front of your joint venture partner for signature, a court which later hears an argument over the meaning of that contract may be inclined to find against you. Consulting an attorney with expertise in these legal principles will allow you to ensure that they are properly dealt with and, where necessary, excluded by agreement.
A similar pitfall in not seeking the advice of a lawyer is that downloadable standard form documents may be out of date or invalid in a particular context or jurisdiction, warns Catey Hill of MarketWatch. The law is ever changing and, while a practicing lawyer is likely to spot that and make the necessary changes, reliance on a standard form agreement alone may leave you in a spot of serious bother.
A Road You Never Intended to Travel
That is not the end of the risks involved with usurping the traditional attorney-client relationship. A further danger presents itself: The use of standard form or boilerplate agreements, in the absence of consulting legal experts, may lead you down a completely misguided road. As Jean Murray reports, it is quite conceivable that a user without legal knowledge may misconstrue the very nature of what they need, and perhaps download a standard form partnership agreement when a joint venture agreements was in fact the type of arrangement that user was seeking to conclude.
If you do manage to find the correct form of agreement, you may end up signing off on something that gives you little scope for remedy if things go wrong. Hill’s article warns that standard form agreements may have arbitration clauses which specifically prohibit you from heading straight to court if your counterparty breaches the contract. On the other hand, you may want to include an arbitration clause in a boilerplate contract which omits it, as this has the potential to save costs if things turn litigious and you end up needing a business litigation attorney, which can often be an expensive undertaking.
Spend Time and Money Now, Save Them Later
The internet is a useful self-help tool. There is absolutely nothing wrong with sourcing standard forms and contracts to online to give you an idea of some things you might want to include in your contact, non-disclosure agreement, non-compete or other legal document. You should just be aware of the potential risks that exists in using them as-is, or just as bad, editing them yourself to the best of your ability to suit your projects needs. Your lack of important legal concepts and/or laws just might come back to bite you in the eventuality that things go wrong in the project and you end up going before a judge or mediator.