Publications > Do it yourself legals - not worth the risk

 

It’s quite common in what would seem to be simple business transactions for people to draft their own agreements in an attempt to save money.  The internet and ubiquity of information has made it possible to find almost any sample legal agreement, but the pitfalls of using such agreements can be extremely costly for the untrained in the event of a dispute.

We constantly see a large number of people searching for "template agreements" of a variety of sorts on our website.  What these people (Bush Lawyers) don't realise is that in the event of a problem with the other party to a transaction there is a much higher probability that they will end up in trouble.  If this happens, the cost of fixing the legal problem will far outweigh any saving that were made in the first place.

In a lot of cases standard form agreements or "templates" can save money where there is no dispute over the terms.  However this cost saving has to be balanced against the potential risk and significantly higher cost in the event of a dispute.  There are many reasons why it takes a minimum of four years at university and six months practical training to be admitted as a Solicitor in Queensland.

 

Pitfalls of using other peoples agreements

 

The hidden bias in any agreement

When a Bush Lawyers first finds what they think is a perfect agreement for their needs what they may not realise is that they are probably written from the Solicitors clients perspective. Thus in the case of a settlement agreement prepared by the plaintiffs Solicitor in settlement of a debt, the agreement would probably have terms and conditions that would be more onerous on the defendant and more favourable to the plaintiff.

 

Similarly in the case of a business sale agreement written by the seller's Solicitor, if not amended, it's likely that the agreement would not contain as many warranties and other provisions that it would if it was prepared by the buyers Solicitor.

 

Therefore, someone without legal training may be using an agreement that they think is perfect for their needs, but in reality it is missing key provisions or has extra terms that disadvantages them. Only a qualified Solicitor can advise on such issues.

 

The elements of any contract

At a practical level any legal agreement is made up of the following broad components:

	the key contractual terms;
	clauses to assist interpretation;
	clauses that are required by legislation;
	clauses that case law dictates should be there (or should not be there); and
	clauses that are not there because they are implied at law or because they are prohibited from being there; and
	execution clauses.

 

If the Bush Lawyer uses a template agreement it could be that both legislation and case law have changed and you are at risk. It may not have been drafted in the right jurisdiction, and commonly it is not executed correctly. Therefore, what you think you are being protected against, may, in the event of a dispute over the agreement, be struck out by a Court, or the agreement may not be binding at all.

 

Business professionalism

When presented by an agreement drafted by a Bush Lawyer it says a lot about about the person drafting such an agreement.  What else are they cutting costs on and why aren't they using a Solicitor?  Is this the standard of what I can expect from this business?

 

In a lot of cases copying someone else’s agreement is also a breach of the authors copyright, so if they are prepared to break the law in this area, what else are they doing?

 

As a Solicitor acting for a client to a commercial transaction it puts me on notice that further investigations for my client are required.  Having said that, it certainly makes sense to negotiate the broad commercial terms of an agreement before consulting a Solicitor, but even advice on this should be taken by the Bush Lawyer.

 

Modifying and using agreements

Often businesses have agreements drafted to their particular need by their Solicitor, then continue to use them, without consulting their Solicitor over and over again. This makes sense in the case of standard form contracts, that are drafted with this use in mind, however in the case of agreements that need to be tailored, the Bush Lawyer can get into trouble if they don't consult a Solicitor.  This is particularly the case if assigning the agreement or amending it after it has been executed.  Experience has shown that this is rarely done correctly by Bush Lawyers and many problems typically arise.

 

Consult your Solicitor regularly

When entering into any sort of commercial transaction it makes sense to consult your Solicitor just to check that you are not creating any legacies that will need to be addressed at a later stage.

 

This article is not intended to be an exhaustive analysis of why you should not do your own legals.  It is simply an attempt to highlight some of the potential risks and show that doing it yourself can cosr much more than you saved in the first place.

 

 

 

Malcolm Burrows B.Bus.,MBA.,LL.B.,GDLP.,MQLS

Associate

 

"The information contained in this article is general in nature and cannot be regarded as anything more than general comment.  Readers of this article should not act on the basis of this comment without consulting one of Rostron Carlyle's legal practitioners who will consider their particular circumstances".

 

Expertise

 

Rostron Carlyle's lawyers have a wide range of experience assisting people in all aspects of corproate law.

 

Not only will you find that Rostron Carlyle is likely to have assisted someone in your exact situation, but you’ll find that a Rostron Carlyle lawyer can distill a complex legal issue into a set of actionable options for you to consider.

 

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