Corporate Counsel Partners, ALCSmith&wilson Legal Solutions for Entrepreneurs and Emerging Companies

Contract Drafting and Negotiation

 On July 8, 2014
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These days, you can find just about any contract you need on the Internet … for free. So why would you pay an attorney to prepare a contract?  It’s a good question that we often get, and it deserves a thoughtful answer.

The main thing to consider when using these agreements — whether they are “generic” or actually documents that have been used by well-known companies — is that you are usually not in a position to determine the impact of all of the provisions contained in the agreement. For example, what if the contract you located applies New York law.  Is there any impact if you simply change the provision to California law?  What about the other terms of the agreement?  Are they in your favor, or was the contract negotiated so that it favored the opposite party?  Even more important, are there clauses that are not included in the contract that you’ve located, ones that are specific to your industry, ones that could limit your liability, or which would have improved the form if they were included?

So what’s a reasonable alternative? Won’t an attorney simply pull up a form that they have used before, modify a few provisions, and then charge you a significant amount of money for a few minutes of work? Not if your counsel is drafting contracts with your interest in mind, rather than filling out the equivalent of a legal “Mad Lib.”

First, selecting the proper form is a very important step in the process. We start by listening to what you are trying to do, and by asking questions about your specific use of the contract.  For example, what are the problems that you have experienced in the past, and which liability do you want to avoid at all costs? Are their terms that must be included in the contract, and others that you want to avoid? We take all of this information into consideration to determine which form would best suit your needs. As we discuss below, the information you provide can leads us to create a form specifically for your needs.

Second, because we have drafted hundreds of contracts for our clients, we are able to quickly assemble the first draft of a contract so that we can work with you to tailor it further. This step is crucial, because there are many types of contracts – and lengths of contracts – that can achieve similar results. But our main concern is how it will be used in your business, and how you want to interact with the people with whom you contract. For example, some lawyers believe that the longer the contract, and the more provisions it contains, the better it will protect you. While this is true in some circumstances, any salesperson knows that the longer the contract, the harder it will be for your customer to sign it. We let you determine what is more important to you:  including every conceivable provision that could be packed into a 25-page, single-spaced agreement, or preparing a contract with reasonable protection that remains easy for your customer to sign.

Third, there are times when the type of transaction or business process you are describing requires a custom agreement, one which isn’t readily assembled from the forms we have prepared in the past. This is where the ability to quickly prepare agreements for innovative businesses becomes one of our key differentiators. Many of our clients have created new business methods for which there are no contract templates, and we have significant experience taking your idea and turning it into a specifically-tailored contract.

Finally, we always welcome our clients providing a form they already like. Unlike other attorneys that look with suspicion on any form that they didn’t create, we appreciate that our clients know their business better than we do, and are very capable of finding a form that they believe strikes the proper tone and right balance for their use. We won’t be shy about telling you if we think a better form is needed, but we are often happy to take that form and to tune it up for your use based on the provisions we think should be added or modified. For many of our more sophisticated clients, this type of collaboration not only saves money, but shows that we are truly interested in working together whenever we can find a more efficient way to complete the task.