Free contract templates from the internet: DON'T DO IT!

Not all contracts are created equal!⁠

If you read a bad book, you may suffer some disappointment, but the most you've lost is some time. If you use a bad contract, you have a LOT MORE TO LOSE! A bad contract is worse than no contract at all. Here are a 3 reasons why:⁠

1. You may unintentionally create obligations for yourself.⁠

How? How do you create obligations that didn't exist before?  Well, there are certain standards that exist by law, whether you have a contract or not. For example, in the UK there is a 14 day "cooldown period" that applies to the purchase of most products and services. It allows a customer to change his or her mind within 14 days and receive a full refund (minus actual expenses proportional to that time period). In this scenario, if you have a contract that allows for a refund period of, say, 30 days, you've just created extra obligations for yourself. Of course, this may be intentional. You could actually want to have a 30 day refund policy. The point is to be careful about unintentionally creating extra obligations for yourself. Another example is in NDAs (non-disclosure agreements), some versions have a clause that requires all information that should be treated as confidential to be in writing and labelled as confidential. Compare this to the more standard version of this particular NDA clause, which usually states that all business information that would "reasonably" be considered confidential should be treated as confidential. If your contract has the labelled, in writing version, you're suddenly having to make written copies of every verbal conversation, having to label it as confidential and send it to everyone you talked to. Extra obligations, am I right?

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2. You may make promises you can't keep.⁠

Continuing with the example of the NDA clause that requires everything confidential to be in writing and labelled, maybe you don't have the staff or the time to label everything. Did you just make a promise you can't keep? Or maybe you have a contract template that has a clause promising not to make your business relationship public. If you are a PR agency and accidentally use a contract template with that clause, you're automatically in breach of contract the first time you do your job!  Of course, you're not getting sued over that one, but it looks unprofessional (and you may lose a client over it if they think you don't know what you're doing).

⁠3. You may be lowering the usual work standard compared to industry standards (bad if you are buying) or increasing the standard (bad if you are selling).⁠

There are common words that may sound weird in a contract but actually mean something in law. The most common of these is "reasonable" or "reasonably" which refers to what a reasonable person (as in normal, not exceptional) in the relevant field (your field of business / expertise, or your customer's or supplier's, depending on the context) would think or do.  Reasonable sounds vague, but it actually has a pretty clear meaning in law. Reasonable is usually the middle ground. Sometimes you may see things like "reasonable efforts" or "best efforts" (for example, efforts to make sure some computer coding is free from bugs). "Best efforts" has a much higher standard than "reasonable" efforts, so you have to be careful about what you ask for, and what you promise.  Making best efforts to manufacture a product free from defects may be cost prohibitive, compared to reasonable efforts.  This is just one example, but there are a lot of modifications of standards that contracts can make.  If you are not careful, you could raise or lower those standards without meaning to - and it's not always in your favor.

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There are so many reasons not to use random free templates you find on the internet. I'm not saying you have to pay a specialty lawyer a ridiculous hourly rate to write a custom contract for you. But you do need to make sure that you are getting your contracts from reliable sources (and maybe spend a little - seriously, just a little - to get something that's been vetted).⁠