Reviewing Legal Contracts and Agreements with an Attorney – Why It Can Matter
We sign legal documents so regularly that many of us sign without reading the fine print. The problem is that a judge will hold you to the terms you signed. So with agreements like rental leases, non-compete agreements, stipulations, etc., where you have significant money at stake, it’s good to do some cost-benefit analysis. How much do you stand to lose if the agreement doesn’t work out? Sometimes the cost is direct and obvious while other times it is harder to estimate. For example, if you are signing a lease agreement that requires you to cover repair expenses for things like the air conditioning system and roof, you could lose thousands of dollars and also have to tolerate a malfunctioning air conditioning system or leaking roof till it’s repaired. A non-compete agreement might make it very difficult for you to find work in the area you prefer to live. Meanwhile, if you stipulate that you will pay $850.00 per month on a contract dispute and will pay attorneys and costs plus interest on the entire debt of $6,000.00, the math is unattractive but possible.
Having an attorney review a legal document can be useful in several ways. The first is that if there are hidden provisions that are dangerous to your interests, they can warn you and suggest changes to the document. Also, there are times when an overview on the law and area of the law can be very useful when considering if you want to sign the document at all or if there’s a better alternative. This is particularly true when dealing with documents that are overall hostile to the client’s interests. To give an example – often people have disputes after their divorce and are looking for ways to resolve them short of court. They might reach a stipulation that is an attempt to resolve those differences but may not fit with the law or be the best way to avoid future problems. An attorney familiar with the area can come up with language that provides a better long-term solution.
There are a number of things that I check for in any legal documents that might be useful to you:
- Are there paragraphs that don’t relate to what has been negotiated? It might be what attorneys call boiler plate (standard language in many agreements) that is harmless. Sometimes these paragraphs hold items that defeat the purpose of the agreement or add in things that were never negotiated and are harmful.
- Are there errors? Surprisingly common, since many times the person drafting the agreement is using an agreement they found somewhere or have used before and are adapting it. In the process, you get language that will cause confusion and trouble to both parties signing the document.
- What are the consequences for not following the agreement? There should be enforcing clauses to make sure both parties do what they should do. However, those clauses need to make sense.
- Is there Legalese or highly complex provisions that are confusing or hiding important terms? Also common, because a sophisticated party doesn’t mind throwing out three pages of legalese when a paragraph in simple English would be more understandable and easier to follow. Sometimes, it’s a way of putting in harmful items that a judge will uphold but is not obvious to those unfamiliar with legal language.
The best time to schedule a consult with an attorney is when the legal agreement is still being negotiated and you have a draft of it. It is far easier to get changes to the document if it’s not presented as final with a short fuse to get it signed and notarized. Most attorneys who review agreements will be able to sit down with you, review the agreement and provide insight and recommendations in a reasonable period of time and at a reasonable cost as long as you have the document and any supporting information or documents. For example, if you’re working on a post-decree stipulation, you need that document and your separation agreement or permanent orders.
There’s one exception to the idea of getting legal input during the negotiation stage and that is when people need documents reviewed that were signed a long time ago to see if they are still good or need revision or for some other purpose. For example, I have clients bring me wills and related documents they did earlier to see if they need revision or should be redone completely. In some cases, the documents are still fine, in other cases, enough has changed in their lives or the original documents aren’t complete. For example, twenty years ago, many attorneys would do a will but not a living will or other documents. Now, most attorneys have a package of these documents at a flat fee because they are supposed to work together to protect the client and their heirs. Likewise, if a client signed a rental lease twelve years ago and has been renewing every year, they may have some questions based on a change in their business or a change in building management.
The best way to tell if you need assistance reviewing a legal agreement is to consider whether the document is written in plain, understandable language, how serious it would be if the agreement didn’t work the way you thought it would an finally, your comfort level with the transaction.