CAUTION WITH FREE BUSINESS CONTRACTS

CONTRACTS  |  REVIEW  |  DRAFT  |  NEGOTIATE  | ENFORCE

Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

I realize that I cannot stop business people from using freely available business contracts that they find on the Internet and modify for their own commercial purposes.

Because irrespective the warnings that I might offer, there are enough people that will proceed with someone else’s business contract and expect that with some minor alterations they will have a legal agreement that will effectively serve their commercial interests.

So, recognizing this reality, I thought it worthwhile to provide several important points of consideration if you do go down the route of using a free business contract that you find on the Internet or purchase a template contract without engaging the professional services of a lawyer.

And to be clear, these considerations might reduce the prospect of serious legal jeopardy from relying on freely available legal agreements, we are not providing any legal advice or representation, such that you are assuming all the risk associated with not retaining the professional services of a lawyer to undertake specific legal work.

1. Although there are generic lawyer templates of business contracts, most of the freely available business contracts have already been substantially modified and altered, such that they could very easily be missing important sections or wording that your particular business transaction might require.

2. Unless your business deal or commercial transaction is exactly the same as the business contract that you are replicating, you could very easily be missing elements that are specific to your business deal or commercial transaction. And even if your business arrangement matches that of the legal agreement that you are copying, there is nothing preventing that agreement from being deficient or inadequate.

3. Far too many free business contracts are exceedingly simple and basic, or even worse unclear and ambiguous, when what you need is specificity as to both the business elements and the legal protections that are required, so as to limit your legal exposure and facilitate the business arrangement that you are looking to realize.

4. Legal terminology and phraseology is rarely, if ever, clear and straightforward. Both the wording and phrasing in business contracts can very easily result in some serious unintended consequences that an infrequent reader of contracts might not readily pick up on. Something that might seem innocuous, might have very serious implications should certain business or legal circumstances arise, which you may well have not considered.

5. Free business contracts are far more prone to serious unintended consequences, which exposes one’s business to greater legal liability while all too often providing inadequate legal protections, as they were not designed with your specific business arrangement in mind.

6. There are particular jurisdictional differences that need to be reflected in the business contracts as between different countries, states or provinces, such that taking a contract designed for the State of Texas and looking to apply it to a commercial transaction in the State of California or the Province of Alberta can be highly problematic.

7. Commercial opportunities can be lost or seriously restricted where the business contract fails to provide appropriate carve-outs or provisions for your specific business arrangement, which are appropriately flexible.

And now with the latest trend seeing ever greater movement to Artificial Intelligence and AI being used to generate business contracts, the creators of AI are exceedingly cautious about this particular direction, making clear that AI might be beneficial, it should not replace professional legal advice.

So, while free or generic business contracts might seem like a quick and easy solution, the potential risks and long-term costs far outweigh the initial savings. Investing in a contract that is tailored to your business’ specific needs and reviewed by the appropriate lawyer, is crucial for protecting your business, minimizing risks, and facilitating clear and productive business relationships.

For knowledgeable and experienced legal representation in negotiating, drafting and reviewing business contracts, contact our law firm by email at Chris@NeufeldLegal.com or by telephone at 403-400-4092 / 905-616-8864.

 

Click here for our law firm's Contract Law webpage.