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If you’re a small business owner, you know all about contracts. They’re an essential tool for effectively managing and developing a business, from employees to contractors to business partners.

Some savvy business owners recognize the value of contracts, but still look for ways to reduce the cost of obtaining them. In some instances, business owners attempt to create their own contracts by using templates available online.

However, creating your own contract is fraught with risks. What you do not know can, in fact, hurt you. From Tom Walker, a small business attorney with Generations Law Group, here’s why you should seek legal advice to help you draft your business contracts.

The dangers of a DIY contract

Drawing up a contract on your own terms and avoiding the expense of a lawyer can certainly be tempting. After all, who knows what your business needs better than you?

But in doing so, you can make some crucial mistakes. Here are five potential dangers you could run into with a homemade contract:

  • The contract may leave out key provisions. Creating your own contract in an attempt to save money can run the risk of unintentionally leaving out key legal terms and clauses that protect your interests as a business owner. Contracts created with online templates often use language that is overly broad or vague, resulting in agreements that, when analyzed, fail to provide the specific protections that make the contract valuable.
  • Contract law varies by state. Failing to understand the legal landscape of your state can result in crafting a contract that, when litigated in court, is found to be unenforceable. For example, employment agreements with non-compete provisions may be enforceable in Texas but unenforceable in California. So if you use a template from a Texas attorney to write your contract for an employment agreement in California, that non-compete clause could be thrown out in court. In the worst case scenario, your entire contract could be useless.
  • Laws change over time. A contract could also become unenforceable because the law changes based on developing case law and legislative updates. Specific terms and language may need to be added, removed, or revised in order to maintain legal force. These changes are nuanced and tend to be overlooked when business owners use DIY contracts, which can lead to agreements based on laws that are outdated or even completely irrelevant.
  • Not all contracts are enforceable. There are a wide variety of legal rules that dictate the conditions that must exist in order for a contract to be valid and enforceable. Failing to include the proper provisions that make your contract enforceable can result in documents that look right but hold no legal weight.
  • You could create an accidental legal obligation. Contract drafting involves very deliberate language. The inclusion or exclusion of various terms can unintentionally create legal obligations and make your business legally liable. This is especially true given the complexity of boilerplate language often found in contract templates. The details hidden within boilerplate language may create obligations that you are not legally required to take on.

Why consult an attorney?

While it’s possible that you could write a DIY contract that avoids all of these potential issues, relying on templates or self-written contracts is a risk that will catch up with you eventually. The resulting problems could culminate in increased liability, decreased protection, and expensive legal fees.

Attorneys have the experience and resources to craft contracts that include the most important provisions to protect your business. They also have a complex knowledge of the law that can prevent mistakes from sneaking their way into your contract from imperfect templates online.

Even if you don’t hire an attorney to write your contract for you, seeking advice on your contract can help you spot mistakes and hone your language to protect you from liability down the road.

The limited savings of a DIY contract are easily outweighed by the time and money that will be spent if any of these risks become reality in your business. As the saying goes, “Prevention is better than cure.”

Get in touch with an Idaho small business attorney today

At Generations Law Group, we understand the challenges businesses face. We have the experience and knowledge of the law to make sure all your contracts protect your interests and help grow your business into a profitable enterprise. Contact us today to schedule a consultation.

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