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Contract Mistakes

by | Mar 23, 2023 | Contract Review, Legal Blog

Contract Mistakes

Contract Mistakes

Contract Mistakes. No Written Agreement.
Probably the number one contract mistake people make is not having written agreements with everyone they do business with. I am always amazed by the reasons they give. Yet, regardless of how confident they express their reasoning for not having written agreements, I still shake my head.  There are a million explanations, but no good reason for not reducing business relationships to writing. Every person who has ever sued (or been sued) for a breach of contract issue understands that. 

Here are a few of the million reasons I hear for not having written agreements.

“I’ve always done things with a handshake.” 

“It’s a family member.”

“It’s my best friend.”

“Someone might think I don’t trust them.”

“I can’t afford to hire a lawyer.”

“I trust them.”  

Here are a few of the EXCELLENT reasons for reducing ALL business relationships to writing.

  • Memory rarely serves anyone over 16.
  • You clearly define your expectations.
  • When a problem arises, you avoid the issue of “he said, she said.”
  • When drafted properly, you avoid ambiguous and vague language.
  • In the event a contract provision needs to be proved, there is a paper trail.

Contract Mistakes. Not Reading Agreements Before Signing.
Have you ever signed a document without knowing what was in it? Most of you might be quick to say, “No Way, not me!” Well, I am going to challenge that belief and say, you probably have. For example, if you have clicked “I Accept” when asked to read the Terms of Use, the Terms and Conditions, or the Terms of Service and you didn’t read what they said, then you have entered into an agreement without reading it. 

Here are some of the types of agreements people sign, but they don’t read.

  • Terms of Use / Terms of Service / Terms and Conditions
  • Privacy Statements
  • Work for Hire
  • Car Rental
  • Apartment Leases  
  • Estate Documents
  • Banking Agreements
  • Mortgage docs
  • Publishing Agreements
  • Literary Agency Agreement

Why don’t people read and understand documents before signing

  • They trust the person
  • The document is too long
  • The document is too complicated, too much legalese
  • People are waiting and you don’t want to make them mad
  • Someone will think you don’t trust them
  • They think they understand what the document says
  • They are under the influence of a chemical
  • Their lawyer said, “Just sign here.”
  • Their lawyer said, “Just sign here.”

Contract Mistake #3. Using Templates Without Vetting Them First.
Have you ever downloaded a template from the Internet? Have you ever used an agreement you got from a friend? At one time or another most of us have done it. And, thought it was a good idea.  The truth is, using agreements that have not been customized to your specific needs is a bad idea.  Here is why: 

  • Contrary to popular belief, one size does NOT fit all.
  • Contract Law is state law, and each state has its own rules.
  • The Law changes frequently.
  • Often there are contradictory clauses within the same agreement and you might not know that.
  • You might inadvertently give away important rights, e.g., intellectual property rights.
  • There are terms of art included in contracts that you might think you understand might you don’t.

Bottom line, when it comes to contracts, have written agreements with EVERYONE you do business with;  read all documents before signing; make sure you understand what you have read; if you download a document or borrow from a friend, make sure you understand the implications of doing so.

Francine D. Ward
Attorney-at-Law, Author, Speaker

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