Five Dumb Business Contract Mistakes We See Every Week

Dumb Business Contract Mistakes We See Every Week

As a Business Contract Lawyer, I get to see some entertaining, clownish legalese. Here are the top 5 meme-contracts I’ve had the pleasure of gutting!

Mistake #1: Using a Free Contract Template and Calling It a Day

So, yeah, when you’re looking for a contract, you’re probably thinking something like “I need it to sound official, be written by a lawyer, and just get a good one that people use often.” That’s a good start, but it wiki-experts the context right out of it. Lawyers represent one side and are AGAINST the other side! That means that you can pull a contract online that was (yes) written by a real attorney, but that attorney may have written it for the other side, against you! I seen it!

We lawyers know how to be sneaky, too–we can write things into the contract that make it look like we’re really being nice to the other (opposing) side, when in reality we’re legally required to give them that provision anyway. Brilliant, right? (thank you, thank you, I am humbled). What I’m saying is that it’d be hard for a non-lawyer to spot which side the contract is written for, even if they knew to look. 

Another thing that happens with online templates, even when they were written by a good attorney advocating for your side, is that the contracts are outdated. In Georgia, we had a major change to non-compete laws for employees in 2011. As a State, we used to be very employee favorable, but after 2011, our State 180’d and is now very employer favorable. All the lawyers I negotiate with know about this, but the employers who grabbed templates online, for 15 years now, have been screwing themselves and using terms that are still favorable to their employees. 

The news has weekly updates on major shifts in the law, and these laws require brand new contracts that fit all of the changes.

Mistake #2: Vague Terms, Vibes-Based Scope, Deciding You’ll “Sort It Out Later”

With the use of AI, people are scrutinizing their contracts a LOT more than they used to. Maybe the vibes were great when you first met, but now that your job is done or the product is delivered, the customer puts your vague contract terms into AI and tries to pick it apart and take advantage of a bunch of loopholes in there. You’re like, “c’mon, man, we talked about this!” But they’re pointing out real gaps in your scope of work and waivers, and to them, “it’s just business.” 

Real lawyers are great at plugging loopholes and writing specific SOWs (scopes) so that you’re functionally AI-proof. 

Mistake #3: Verbal Side Deals and Handshake Promises

Most contracts have what’s called a merger clause that voids all “other” agreements, like handshake deals, text messages, and contract changes that you just talk about but don’t take the time to write down and sign. That’s all great if nothing ever goes wrong. I really wish things would never go wrong, but alas, they often do, and when they do everything you said is null and void. No, really, it has literally zero legal weight. It’s harsh, but that’s reality; you have to get the contract right in the first place, and if there’s ever a change order or new term, you have to write it down and sign it. In the wise words of James Hetfield, nothing else matters (but the written and signed agreement).

Mistake #4: No Plan for When Things Go Sideways

Good lawyers give you OPTIONS; non-lawyers paint themselves into corners. Real life, business, commercial activity, is plagued by unexpected contingencies. Government contracts, for example, literally add in a contingency fund for what are (legally) called “Unknown Unknowns.” Yes, that’s the formal term; not a typo. Your contract should have a solid plan for things that happen that you don’t anticipate. Acts of God? Someone dies? An epidemic makes the contract one that you can’t legally carry out? Figure out who’s left holding the bag when the unexpected happens! (Hint: if you’re the one hiring the lawyer, that lawyer can make it so that you’re not the one holding the bag, just the cash; you get the cash 😉

Mistake #5: Signing Without Reading (We Know You Skimmed)

If you’ve read this far, you know that we lawyers are sneaky-good at camouflaging gotchas into contracts that non-lawyers won’t catch, even if they DID read the contract. Obviously, most people don’t, which is wonderful for us and our business clients!

Seriously, read the contract, and have a legal professional read it, too, so that you know everything that you’re signing. These contracts are NOT your friend, despite the very charming salesperson handing it to you (they’re probably paid on commission).  

Get an Atlanta Business Contracts Attorney Before You Face a Lawsuit

Hiring a lawyer to write your contract is a bit like playing a board game where you get to make the rules. For example, I’ll be the blue player, and the blue player gets $500 extra every turn and gets to roll twice and pick the roll they want to use. 

Sparks Law
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