Contracts are an integral part of our daily lives. From your cell phone bill to signing a lease for an apartment, contracts formalize agreements and protect both parties involved. However, a common misconception is that only lawyers can draft valid, enforceable contracts. This is simply not true - many standard contracts can be created by non-lawyers using templates or self-help legal books. However, there are certainly benefits to having an attorney review or create a contract, especially when large sums of money, valuable assets, or complex terms are involved. This article will examine when it is advisable to hire a lawyer to draft a contract versus when you may be able to do it yourself using resources like online templates.
A contract is simply an agreement between two or more parties that is legally enforceable. The essential elements of a valid contract are: an offer, acceptance of that offer, consideration exchanged between parties, mutual assent or meeting of the minds, capacity of the parties to enter into an agreement, and intention to create a legal relationship. Contracts can be written or oral, expressed or implied based on the conduct of the parties. From complex multi-million dollar deals between corporations to simple unwritten agreements between friends, contracts aim to provide certainty and protection to everyone involved.
The Benefits of Having a Lawyer Draft a Contract
The top reason to have an attorney draft or review a contract is that lawyers have specialized expertise in legal language, terms, and potential pitfalls. They translate your wishes into air-tight legal prose that stands the test of time. The benefits of having an attorney include:
- Ensuring all essential contractual elements are adequately addressed - Lawyers ensure offers, acceptance, consideration, and informed consent are all clearly demonstrated in the contract's language. Any issues raised during negotiation of the agreement will also be incorporated to avoid future disputes.
- Mitigating potential legal risks - Attorneys can identify areas of liability, taxation implications, conflicts with other agreements, and loopholes that could allow one party to back out. They draft clauses to avoid ambiguities and address worst-case scenarios.
- Properly structuring the agreement - Lawyers consider applicable laws, legal precedents from case law, and ensure contracts are formatted correctly. Complex deals may use a master agreement plus supplementary schedules, amendments, and exhibits.
- Avoiding ambiguities or unclear terms - Attorneys articulate details like payment terms, timing, responsibilities of each party, termination provisions, dispute resolution procedures, and other key points clearly and without room for alternate interpretations.
- Specialized experience in certain contract types - Real estate, construction, technology licensing, employment, mergers and acquisitions - these types of deals have specialized terms and regulations lawyers understand.
For high-stakes contracts, the potential risks and complex legal implications make hiring an attorney well worth the expense.
When Can You Potentially Draft a Contract Without a Lawyer?
While it is always best practice to have contracts professionally drafted, there are some situations where using a DIY approach may be reasonable if both parties agree.
- Casual agreements between friends - If you are loaning a pal $20 or agreeing to split shared housing expenses, a simple written agreement you create may be sufficient.
- Using standard form contracts or templates - Many contracts like short-term room rental agreements or freelancing gig work contracts follow a very standard boilerplate structure you can find templates for online.
- Well-informed parties agreeing on clear, simple terms - If both sides clearly communicate expectations, obligations, and processes without legal jargon, a basic agreement may be feasible.
However, it is recommended that someone with strong knowledge of contract law review any DIY drafts before signing. Additionally, always read contracts carefully before signing, even if a lawyer drafted them. Do not blindly trust the other party and be sure you understand what you are agreeing to.
Potential Risks of Not Consulting an Attorney
Attempting to draft legal contracts without proper experience has consequences. Some issues that can occur include:
- Overlooking important clauses or terms - Without legal expertise, key provisions like limitations of liability, arbitration procedures, and confidentiality requirements may be missing from an amateur contract.
- Ambiguous language leading to misunderstandings - DIY contracts often lack specificity and legal exactness, leaving wiggle room for parties to interpret clauses differently. This breeds conflicts.
- Exposure to unexpected legal liability - Without lawyer review, you may unknowingly take on more debt, tax implications, or other risks you were unaware of.
- Increased chance of unenforceability -Contracts lacking certain elements or with unclear terms are much harder and more costly to litigate and enforce if deal sour.
While hiring an attorney costs money upfront, it often saves you money and hassle down the road compared to trying to navigate complex legal agreements on your own. Preventing issues from the start is easier than trying to correct them later.
Using Legal Templates as a Middle Ground
Template services and online platforms like LegalZoom, Rocket Lawyer, and LawDepot provide a middle ground between DIY contracts and hiring a lawyer. They supply legal forms, templates, and questionnaires that allow you to create common contracts tailored to your situation. Some key considerations:
- Convenience and cost savings - Completing user-friendly templates is faster and more affordable than hiring an attorney for end-to-end contract drafting.
- Access to standard, vetted legal language - Templates are often crafted by lawyers, providing better legal terminology than drafting from scratch. Some sites offer lawyer review of final documents.
- Covers common contract types - Basic templates for agreements like NDAs, wills, LLC operating agreements, leases, and employment contracts are available.
- May lack customization - While you input some specifics, templates still take a one-size-fits-all approach and may not address unique needs.
- Pitfalls without lawyer review - Templates don't ensure you've addressed all relevant legal issues and risks for your particular situation.
Template services are often a good middle ground choice for common contracts, especially when both parties are amicable. But for complex, high-value contracts, consulting an attorney remains advisable.
Key Considerations When Deciding About Legal Help
When determining if you should hire an attorney to assist with drafting a contract, key factors to weigh include:
- Complexity of the agreement - More complicated terms of service, intricate product specifications, strict performance requirements, and regulatory issues merit professional legal help.
- The value of the transaction or assets involved - If large sums of money, valuable property, or critical IP is on the line, legal expertise is likely worthwhile.
- Your familiarity with contracts and legal terminology - If you don't work with contracts regularly, lack knowledge of laws impacting the agreement, or are unfamiliar with legalese, the risks of DIY drafting increase.
- Potential consequences of a dispute - If a deal gone bad could seriously impact your finances, business operations, or rights, hiring a lawyer helps protect you.
- If the other party is represented - If the counterparty has legal counsel, you'll be at a disadvantage negotiating or drafting an agreement yourself.
No single factor alone necessitates hiring a lawyer. But if several are present for a deal, the benefits likely outweigh the costs.
Drafting contracts seems daunting, but legal help is not required for routine agreements between cooperative parties. Hiring attorneys becomes advisable for complex, high-value transactions where getting the details precisely right matters. There is nuance to when DIY drafting may work versus when you need counsel - consider the risks, look for middle ground options like templates, and aim to at least understand contracts even if you don't write them yourself. With the right balance of protection and pragmatism, contracts can create mutually beneficial relationships backed by the law.
About Linden Ardith
Linden Ardith is a diligent paralegal with 5 years of experience in corporate law. She is knowledgeable in drafting contracts, conducting legal research, and preparing trial documents.