Show Me the Template! (And Why That’s Not Always the Smart Move)

Can you just give me a template?

It’s a question I hear all the time. And on the surface, it makes perfect sense. Why spend ten minutes reading — or pay for advice — when you can grab a document, fill in the blanks, and move on with your day?

Templates can be really useful, lawyers wouldn’t get through a day without them – but lurking behind simple clauses can be enormous risk.

Templates can be appropriate if:

• your business uses lawyer-drafted templates for genuinely standard, low-risk situations
• you operate in an industry that publishes current, authorised, template documents (such as in certain construction or real estate contexts) or
• your lawyer has reviewed and approved your drafting of the document for the particular transaction.

If those boxes are checked, go ahead, templates can save time and money.

But here’s the problem. Most businesspeople aren’t lawyers, and most templates don’t come with context.

A well-drafted-looking document gives a comforting sense of safety. We assume a lawyer checked it at some point. We assume it’s up to date. And if it comes from an industry body? Even better — surely it’s been vetted?

Maybe. Maybe not.

Before you fill in the blanks, it’s worth asking yourself:

• is the template too narrow or too broad? Does it deal with everything you need it to or does it feel incomplete?
  Case Study: Client sent me a template restraint of trade to check. That’s what the client thought he wanted and on the face of it, it said what he wanted it to say. But, when I scratched the surface, what the client actually needed was an employment agreement, and I advised that in the circumstances any restraint would be unenforceable, even if it was drafted into the agreement.
• Does it take account of the local laws applicable in my jurisdiction? If the template is drafted for New South Wales, it might not work properly (or at all) in Victoria.
• Does it contain any illegal clauses? If it does, this may void the contract all together and expose you to penalties or a claim for damages by the counterparty.

Sometimes, the answer is that the matter is very low risk and the potential ramifications don’t bother you. The law might step in to save a party if part of the document is illegal or unenforceable. The dollar cost of getting it wrong might be manageable.

But often, the stakes are much higher.

Unless a document has been drafted by — or at least reviewed by — your lawyer, you don’t really know:

• where it came from;
• whether it reflects current law; or
• whether it deals with particular risks that arise in your business or industry.

One major danger area for almost every business today is privacy and consumer law (especially the unfair contract terms regime). These laws change regularly, apply more broadly than most people realise, and can make parts (or the whole) of your contract unenforceable — or illegal — without you ever knowing, until its too late.

Contracts can be a whole lot more complicated than you expect.

You don’t have to send every document through a lawyer. Know when you should.

Ask Better Questions – Make Better Decisions.
www.lawyermeup.au