Making Business Happen

Why Contract Templates Are Bad Business

On Behalf of | Sep 1, 2023 | Business Law

When a business is new and money is tight, it’s not unusual for entrepreneurs to take the same “do-it-yourself” attitude that launched their enterprises and apply it across the board. A lot of new business owners learn how to do everything from building their websites to filing their taxes on their own.

You don’t want to extend that D-I-Y attitude to your contracts, however. While there are tons of free contract templates available online, these are largely “boilerplate” agreements, filled with generic language and bloated clauses that can lead to complicated legal issues in the future. Here’s why you shouldn’t trust a contract that you find online when you’re trying to conduct business:

They lack important specificity

Contract templates are, by their nature, generic. They are designed to be a quick and easy solution for routine agreements. However, every business transaction is unique, and what works for one may not work for another. Using a contract template risks omitting important clauses or terms that are specific to the transaction at hand or your industry, leaving you and the other parties vulnerable to disputes.

Turgid language can create problems

A lot of the free (or low-cost) contract templates you find online have legal language that cannot be easily decoded by the average layperson. Small words (like the difference between “and” and “or”) can have big meanings when there’s a dispute. While attempting to cover all the possible bases, contract templates can inadvertently introduce ambiguous or contradictory language into agreements – and that can lead to problems with interpretation and enforcement.

They may be outdated or invalid

Laws and regulations are subject to change – and you have no real way of knowing if a contract you find online is actually outdated or even valid under Texas law. Relying on template agreements that do not reflect the latest legal developments can leave your business exposed to serious legal issues.

You can miss important opportunities

Every business relationship is unique, and the terms of each contract you use should reflect the unique nuances of each partnership you have. Contract templates limit your ability to negotiate terms that suit your specific needs and goals. This lack of customization could mean missed opportunities to include clauses that can benefit both sides, such as performance milestones, termination triggers, or agreements surrounding intellectual property rights.

Relying on contract templates without adequate consideration for the specific needs and expectations you (and the other parties) may have can put a strain on business relationships. A well-tailored contract that respects the interests of all parties involved, however, sets a positive tone that can foster trust. When it comes to your business contracts, one size most certainly does not fit all – and details matter, so seeking legal guidance proactively is wise.