Buying goods and services off the internet has become commonplace. But extreme caution is in order with respect to using and buying form/template contracts offline. Bluntly, it is just not a good idea and making a mistake will be expensive both in terms of a potential loss of your bargain and litigation costs if there is a lawsuit. This is particularly true for business contracts. You should seek the advice and counsel of an experienced San Diego corporate attorney for drafting and review of your contracts. Here are more reasons to never use off-the-internet form contacts.

Forms are Old and Out-of-Date

The laws here in the Golden State are constantly in flux and changing. If you find a form contract online, do you know how old the form is? We all understand the concept of expiration dates and “best-if-used-by” dates on food and drinks. The same principle applies to form and template contracts. As an example, a couple of years ago, California passed a law making a confidentiality provision illegal in a settlement agreement concerning claims of sexual harassment. If you find a form contract online, it might have an illegal or now unenforceable provision like that.

You Might Not Get What You Think You are Getting

Another problem with online templates and form contracts is that the form might contain language that is voided or changed by operation of law. That is, the form might have certain language which is what you want, but there is a statute or a judge-made case law which changes the words or gives them a different legal effect. An example here is a one-sided attorney’s fee clause here in California. A one-sided attorneys’ fee clause might read something like this:

“Attorney Fees. If SELLER files litigation, arbitration, or other proceedings to enforce this Agreement, if SELLER prevails, SELLER shall be awarded its reasonable attorney fees, and costs and expenses incurred.”

Note that the Buyer is not allowed to collect attorneys’ fees if the Buyer prevails. Maybe that is what you want when you use a form contract from the internet, but this type of one-sided clause is not allowed in California. If the lawsuit is based on contract, then California law rewrites the clause to make the provision mutual. See Cal. Civil Code, §1717. In this example, if you use a form off the internet, you will not be getting what you think you are getting.

Your Deal is Unique; That Form Contract is Not

Every transaction is unique. It is nearly impossible to find an internet contract that will cover all the circumstances of your business and your contractual needs. A template will nearly always have some sort of ambiguity or inconsistency that will cause legal problems in the event of litigation. Even if you are using a preprinted form for your customers and vendors, your business is unique and has unique needs. As such, the preprinted contracts should be custom drafted.

Contact San Diego Corporate Law

For more information, call Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard focuses his practice on business law, transactional, and corporate matters, and he proudly provides legal services to business owners in San Diego and the surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.

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