In today’s Freedom Friday blog and email newsletter, I want to talk about a topic that I am not asked about enough, at least not in the right kind of ways. For those that don’t know, I am a panel attorney with Rocket Lawyer, which is a competitor of LegalZoom. Rocket Lawyer is a unique service for small business owners, because by becoming a paid member, you get access to all sorts of templates for contracts and other matters (and you don’t get templates for certain other things), but you also get access to attorneys through their portal, and you can ask “free questions” through that portal.
One of the “questions” that I frequently get in the portal goes something like this: “Please review this contract (about such and such topic) … is this okay?” The Rocket Lawyer “member” (and prospective client) wants me to review the contract they found online, through Rocket Lawyer, and make sure it is legitimate, complies with laws and regulations, etc. In other words, the prospective client has downloaded a template for a contract from Rocket Lawyer, filled in all the blanks, etc., for their specific situation, and created a contract for me to review. While sometimes these online contracts are acceptable, there are many problems with these online contracts. So, in today’s Freedom Friday blog and email newsletter, I’m answering the question, “What’s the problem with online contracts?”
Most of the time, contracts that are generated by Rocket Lawyer, LegalZoom, or other online resources are short contracts, with simple terms, and no fine print, which sounds great, but frequently leads to breaches and other enforcement problems. The problem is that many times these online contracts are poorly worded or have missing terms. In fact, many times on Rocket Lawyer, I will tell the Rocket Lawyer member that he or she needs to add terms to their contract to make it more enforceable. Here are three key issues with online contracts:
1. Vague Language
The first key issue with online contracts is vague language. Many online contracts are vaguely drafted and leave too much room for interpretation. This is especially true if the contract is intended for “consulting services” (this needs to be more specifically defined), or “payment is due upon completion” and similar vague terms.
2. Missing Terms
The second key issue with online contracts is missing terms. Many templates for online contracts lack crucial provisions such as payment schedules, late fee triggers, change order or scope modifications, termination clauses, governing law, venue, dispute resolution, attorney fees, etc. If there is a problem with enforcing the contract, the lack of these terms will create issues with enforcement in a breach of contract lawsuit and the court will have to fill in the blanks.
3. Too Simple
The third key issue with online contracts is that they are just too simple. Not only can they be vaguely drafted and/or omit key terms, but they can be too simple. This can be fixed by drafting the contract to include a detailed scope of work, clear payment terms associated with deliverables, adding a force majeure clause, adding limitations of liability, an attorneys fee clause, and signatures and execution dates.
Thinking about starting a small business? Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth? Please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at https://www.libertylegalok.com/