April 22, 2015
Warning: This article contains tough love! If you’re looking for a feel-good article to read, full of platitudes and bereft of substance, this is not the article you are looking for.
Since I started practicing law and drafting contracts for my clients to use in their businesses, I have often heard people say things like, “I just want a simple, 1-page contract.” I ask them, “Why?” Invariably, they provide me with a bad
reason excuse for wanting a “short, simple, easy-to-read” contract. Here are a few of my least favorite reasons excuses:
- If the contract is too long, nobody will be willing to sign it.
- There is too much “legalese” I don’t understand!
- I don’t have time to read / review this!
- The other party’s lawyer(s) say(s) this is “total overkill!”
- This is too customized. I just want a template I can use for all my clients.
Each one of these excuses is seriously awful. The one that takes the cake, though, is number four. If you are a client, you should not be talking to the other party’s / parties’ lawyer(s), except through your own lawyer! That is an extremely rude, disrespectful, and unprofessional way to treat your lawyer; worse, it opens up the other party’s / parties’ lawyer(s) to complaints to the Bar Association (or your state’s equivalent), and it presents a clear conflict of interest (even if the relevant parties sign a Waiver of Conflict of Interest). Waivers of Conflict of Interest should only be used in the rarest of circumstances, and not merely for the convenience of one or more parties to a transaction in which all parties are already represented by counsel.
But I digress. To object to a contract because it is 80 pages long instead of 8, or because it is 10 pages long instead of 2 is not only arbitrary, but nonsensical. The purpose of a contract is to reflect, in writing, the agreement between two parties about their rights and obligations under an agreed-upon set of circumstances. In other words, a contract should clearly state who is acting, how they are acting, what will be accomplished, who will be compensated, how compensated parties will be compensated, and so on. The goal is not to do state these things in an arbitrary number of pages. The goal is to state these things unambiguously. To demand a contract be one or two pages long is like saying, “I want to drive from Seattle to Atlanta, but I refuse to drive any car that requires gasoline, tires, or a steering wheel.”
A contract does not exist just to “get the deal done” as fast as possible, or to make everyone happy, or to be aesthetically pleasing (though it should be easily legible). If you want to convey a piece of real property (real estate), for example, you cannot do so without a signed writing. The simplest way to do that is through a Quitclaim Deed, which may well be one page long. Buyer and seller get very little protection with a Quitclaim Deed, though. So, it’s not effective for most real estate transactions, because buyers have powerful incentives to protect their investment, and sellers have a powerful incentive to get paid and to be relieved of any post-sale obligations. If you find people are reluctant to sign a contract, just because it is lengthy, it is exceedingly likely they do not understand all of the elements of the deal. If such people understood all the elements of the deal into which they are entering, they would further understand why the contract is as long as it is: because it must be that long to reflect all the elements of the deal.
“Legalese” is an epithet bandied about far too often. A term, clause, or phrase is not “legalese” simply because one may not understand something in a legal document. Legalese is “language containing an excessive amount of legal terminology or of legal jargon.” What is “an excessive amount”? I contend an excessive amount of legal terminology or legal jargon is whatever is written in such a way as to be indicative of an intent to obfuscate or confuse the reader. Nearly always legal terminology and “legal jargon” is reasonably required to effect a desirable result in a contract, but terms should be properly defined and used with as much conciseness and brevity as the author can muster. Usually, when a reader complains about “legalese,” either they are too lazy to take the time or they are genuinely unable to understand what they are reading. Anecdotally, I have found it rare–and increasingly so–to encounter a document truly chockablock with legalese.
“The other party’s lawyers don’t like it!” So what?! Don’t you think that might have something with their incentives not being 100% in line with your own? Come on. Think it through. You should always trust your own lawyer more than the other party’s / parties’ lawyer(s). If you don’t trust your lawyer, get independent counsel to review your attorney’s work product. DO NOT go to the other party’s / parties’ lawyer(s) for advice! That puts them in a conflict of interest position, and such behavior is the hallmark of an absolute tyro.
“I just want a template; I don’t have time to read / review this; this is too customized” and the like are all things that only the laziest, least organized, and / or most miserly people will say. Contracts are not supposed to be one-size-fits-all. Have you ever purchased a one-size-fits-all Halloween costume? Yeah? How’d that work out for you? Very few people can honestly say a “one-size-fits-all” solution actually fit them. What they can honestly say, however, is that their solution was cheap, in every sense of the word. That’s not really a good thing, because the maxim, “You get what you pay for,” really is true. There is a time and place for form contracts and templates, but you need to talk to your lawyer about how to use them properly, because most of the time a template is not going to be an effective solution in the event of an actual dispute.
If you are a business decision-maker, you need to pull up your big girl panties and read your contracts. You need to realize that there are people out there working to take away from you everything you have worked so hard to build: the government and your competitors. That’s a Leviathan and a Behemoth, and they both look at you the way Wimpy looks at a hamburger. The difference between suffering a business loss and saving yourself a boatload of money and headache, later, can come down to having strong contracts–contracts written under the assumption that there will be a dispute, and the terms of the contract will need to matter, and will actually need to protect your interests.
Failure is not our only punishment for laziness; there is also the success of others.
Lawyers who are doing their job, in drafting a well-written contract, will not consider the length of the document, for it is irrelevant; instead, they will consider what outcomes are most likely to occur under the circumstances, and they will include language which addresses those outcomes in an unambiguous way. If there is something you don’t understand in the contract your lawyer drafted for you, ask them to explain it; that is also your lawyer’s job. Don’t just write it off as “Legalese.” Don’t be lazy. Don’t be arbitrary. Don’t act like a spoiled child, throwing a tantrum because the person who is trying to protect you won’t let you have your way for your own good. You hired your lawyer to protect your interests, and to draft a contract that will continue protecting your interests well into the future. Let them do their job.
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