One common question lawyers hear is “Why do I need an attorney when templates and samples are freely available on the internet?” While this may be true for legal services, it is equally true doctors, plumbers, electricians, and auto mechanics. A doctor should not attempt to perform surgery on himself; in most cases you should not draft your own agreements.
If you’ve ever looked at a contract, a non-lawyer or lawperson will quickly see many confusing terms , many of which appear to be legalese and do not appear to express the intent of the parties, or even be relevant to the contract. In a perfect world, every contract could be a simple sentence explaining what the parties want (e.g., “Joe will sell his car to Maria for $500.”), but we do not live in a perfect world We live in a world where words are based on cultural, family and relationships, not to mention past business relationships. These clauses are important in the formation and enforcement of contracts and knowing which clauses to include in your agreements could mean the difference between achieving your original intent in entering the contract and a negative outcome.
This post is the first in a series of articles that will discuss common contact clauses, and why you should have a lawyer on your side whether to include them in your contracts.
- Contra Proferentem. The doctrine of contra proferentem requires that courts favor the party that did not write the contract when the contract itself is not clear.[1] This is a rule that applies to every contract, and it means that the party makes drafting the agreement bear the risk for its completeness, precision, and accuracy. If there is ever a dispute, a court’s preferred interpretation will be the one that works against the interests of the party who drafted the wording. So, if you wrote the contract, there will be a presumption against you if there is any ambiguity in the contract. An attorney can help with ensuring your contract is complete and precise to avoid this issue.
Choice of Law. Most contracts are governed by state law, and if your agreement is with someone in California or New York, you need to ensure that the law that applies is the most favorable to you. That is likely your home jurisdiction (Texas), but not always. To protect yourself, your contract should typically include a “choice of law” provision incorporating the state law you wish to govern your agreement. This is a decision with which a well-seasoned attorney can assist you.- Forum Selection Clause. Just as important is a forum selection clause dictating the geographical location of any lawsuit related to your agreement. No one wants to have to travel in order to defend or enforce an agreement, and by including a forum selection clause, you control where a lawsuit may be brought.
- Severability Clauses. Another key provision in a well-drafted contract is a severability clause. You see this in just about every contract, and there’s a good reason for it. Situations may arise where a court declares one part of the contract invalid, raising the question of what happens to the rest of the contract? Is the entire agreement invalid? What parts are enforceable? A severability clause allows a court to enforce the remaining provisions of the contract as if the invalid section never existed.
These are only a few of the most common contract provisions. Contracts are filled with these kinds of clauses, and we’ll be back in a later post to discuss more of them. While you can find online templates for virtually every kind of contract , they are often generic lack the important situation-specific analysis that may require inclusion or modification of many of the clauses mentioned in this article (or others not mentioned). You gain an important strategic advantage by having a lawyer familiar with your particular goals and circumstances review your contract to ensure it is not only legally sound, but also clearly and fully expresses what you and the other party actually intend. While we now have a lot more information than we used to thanks to the internet, it’s always wise to speak with an experienced professional. Roquemore Skierski stands ready to help you with these, and other issues when it comes to drafting accurate and effective contracts.
[1]Ramsay v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 349 (Tex. 1976)
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