As an entrepreneur or a business owner, cashflow is king. Saving money on the number of pages printed in the office or the number of stamps used can be the difference between keeping the lights on and having to close your doors for good.
One way to save money is by using templates. Templates are commonly used for line items, such as mailing notices, order requests, statements of work, and contracts for services. But template contracts can also be a great way to save on legal fees, as long as you’re aware of what your contract contains.
Watch Your Language
Many template contracts for services contain “standard” language for matters that can be costly if the business owner does not understand the impact when the relationship goes south. Some of the common provisions that may pop up include:
- Forum Selection clauses;
- Arbitration and Mediation clauses;
- Non-disclosure and Non-disparagement clauses;
- Attorney’s Fees provisions;
- Indemnification clauses;
- Limitations on Damages; and
- Non-Solicitation and/or non-compete clauses.
What to Look Out for in a Template Contract
Some of these provisions can be much more relevant than others, depending on the nature of your business, so reviewing the template you’re thinking of using with an attorney can assist you in identifying what should be non-negotiable, and which terms can be flexible. For example, a forum-selection clause, which is a provision that dictates where a court action will be decided, may not be nearly as significant to a company that only conducts business with local vendors, while a company involved in interstate commerce will want to ensure that any disputes with its vendors or buyers will be decided in their home town.
Alternatively, arbitration clauses are very prevalent in certain industries, such as music and entertainment, because arbitration is a great way to resolve a contractual dispute without creating a public record that could hurt the reputation of any of the people or companies involved in the matter.
Know Your Contract Options
Blindly choosing a contract template without understand the legal impact of the terms, or signing a template contract from another company without reviewing with an attorney, can be exponentially more expensive than the price of the attorney review. As the saying goes “Cheaper isn’t always cheaper!”
If you need a qualified legal professional to look over your contracts before you sign anything, reach out now for a consultation.