Why DIY Business Contracts Are A Bad Idea
With increasing regulations on small businesses, the number of contracts required by a firm has increased as well. To meet their legal requirements and cut costs, most entrepreneurs feel compelled to make DIY contracts. It is also commonly believed that having some form of a written agreement is better than having none at all. Unfortunately, the ramifications of a DIY contract are hardly taken into consideration.
Piecing together a business contract on your own may not give you the legal protection you need. A DIY agreement could attract legal complications and massive expenses if you exclude any essentials or even word it incorrectly. As a result, before you head down the path of “amateur attorney,” it’s vital for you to step back and consider why DIY business contracts are a bad idea.
To help you out, the legal experts at The Quattro Firm, L.L.C. have listed three problems you might face with DIY business contracts.
1. A DIY business contract may offer zero protection.
When clients create their own contracts, they often include inappropriate language. This does not afford the protection they believe it does. It may also be prohibited by statute and cause numerous other consequences that could have been avoided by hiring an attorney. It's difficult to undo an ineffectively worded contract, and it's even worse to think that one is protected when that is not the case. Sometimes, an agreement may be so poorly drafted that it offers no protection at all, and very often it's too late to put a suitable contract in place.
2. You could end up paying more for litigation with a DIY contract.
While hiring an attorney at the outset to draft one's contract may seem expensive and cause some financial concerns, it is cheaper than litigation, which is most likely the result after an improper agreement. Preparing a contract can cost a client somewhere between $500 to $3,500, whereas litigation will generally cost $5,000 to $30,000, and sometimes more.
3. State laws may not be considered.
Besides Federal laws, State governments also have a set of rules that businesses must adhere to when it comes to contracts. However, State laws vary from state to state and are changed continuously. This can make it challenging to keep up with local regulations while drafting a business contract without an attorney.
Do things right - Hire a professional
Businesses that draft their own contracts could run the risk of including improper terms, costing them more than they expected. At the same time, they might prepare a contract which offers no protection, thereby creating personal liability for their business project, which is never the goal in business. To avoid putting one's business in harm's way in this manner, it's essential to consult a legal professional.
When preparing a business contract, seek the services of a licensed attorney to safeguard the owner, employees, and the business. The attorney should specialize in transactional law to avoid personal liability and keep the contract under the proper statutory authority.
If it’s too costly to have an attorney draft a business contract, find out if they allow payment by the hour while assisting entrepreneurs in the creation of their contracts. This can bring down the cost of one’s legal needs.
To find top attorneys in West Palm Beach, Florida, reach out to The Quattro Firm, L.L.C. We see our clients as people and not legal issues. This mindset helps us successfully advocate for our clients. It also helps us analyze their needs and tailor legal solutions accordingly. To request an appointment with our trusted attorneys, please click here, or visit our website to know more about our services.