No Country For “Good” Contracts, Or Why Asking If A Contract Is “Good” Is The Wrong Question

One common question I get asked by clients is to look over a contract and tell them if it is “good” or “any good” or “works for me.” So here’s the thing…

I don’t know.

In many cases, I have no idea if a contract is a good thing for a client. It’s not really what I do. Whether or not a contract is “good” for a client is largely a decision for the client. A 10% profit might be great for one client in a certain situation, and positively insulting for another. An arbitration clause might be essential to one client and a waste of time for others. And so on.

The truth is the client actually knows what they want and need from a contract. Even if they don’t understand the language of the contract, they know what they want it to say. They know their business, their needs, and what the terms of the contract need to be for them to be happy. A lawyer can’t generally tell you those things unless they have a longstanding and comprehensive relationship with you and your business, and perhaps not even then.

So what’s the point of going to a lawyer for your contracts? There are plenty of good reasons, actually.   I’m going to cover the three most important here today.

A Full Understanding Of Contract Terms

First, legal advice and analysis of an agreement or contract means comprehension. A good attorney can and will explain the often complex, technical, and sometimes archaically* worded language of an agreement so the client knows what they’re getting into. The client will also understand every stage of the agreement, from entering into it, to what happens if someone tries to break the agreement. Without this knowledge, it’s very hard to make informed decisions about contracts and agreements. You might know what you want out of a contract, but without understanding the language and terms, getting what you want becomes very risky and difficult.

Using Language That Will Stand Up In Court

Second, legal advice and analysis means translation of your needs into binding legal concepts. You might know exactly what you want from a contract, but often you aren’t sure how to put it into the right language. For example, you don’t want to buy art for a project and then find out your “artist” stole the art, and also find out that you’re on the hook for using it without the actual artist’s permission, right? That sounds just terrible. Do you know what to include in a contract to protect you from that and many other harmful scenarios? Do you know how to ensure you aren’t accepting hidden costs or liabilities? Further, do you know what language will hold up in court in your jurisdiction? A good attorney does, and it’s one of the biggest reasons to have one write (or at least review) your agreements.

Avoid Unknowns

Third, a good attorney can advise you on very particular dangers and pitfalls the terms of an agreement may hide. In other words, they can’t tell you if it’s good for you, but they will detect where it’s “bad.” This can save you a lot of time, money, and frustration. It might even save your business in the case of vital agreements.

A good attorney can also tell you about protections you might need that you may have forgotten. For example, they can help you decide if you should have an attorneys’ fee shifting provision, a liquidated damages provision, or a provision allowing injunctive relief. Don’t know what these things are or why they might be important? That’s exactly why you need to talk to a business attorney about your contracts.

There are other reasons to have a lawyer review, write, modify, and help negotiate your agreements and contracts. However, most of them are just some particular flavor of the larger concepts above. For example, knowing what type of agreement you need is a mix of all three, so is renegotiating an existing contract. Comprehension, translation, and safety are the major services attorneys provide with contracts; the clients ultimately decide if that gives them the comfort, confidence, and understanding to make their own decisions.

Your lawyer can’t tell you if you’re going to feel comfortable with an agreement or it will definitely work out for you. Frankly, any lawyer who claims they can is probably not being very honest with you. However, they can give you the tools to decide if you feel comfortable and help you decide if a particular contract or agreement is the best thing for both you and your business.

Which are very important things. They just aren’t telling you if a contract is “good.”

*What does “archaically” mean?   It means “See? It is important to know meanings and definitions!” But seriously, it means “antiquated or outdated”.