THE DANGERS OF CUT & PASTE.

This post, inspired by a real life experience, is in fulfillment of the promise to enlighten you on the dangers of downloading contracts online.

A gentleman “prepared” a contract for a new artiste he was about to sign on, and sent it over for a “thirty minute perusal”. He had downloaded the contract off a template website, changed the addresses, inserted the parties’ names and decided it was good to go.

Well, thank heavens he sent it, because it took us five hours to “peruse”. There was a lot to add, and a whole lot more to subtract.

The use of standard forms is not uncommon. Technology has placed almost anything at our fingertips, and many times when we have encountered challenges that could have been solved by people we know, we have turned instead to search engines for solutions.

Without further ado, here are five reasons why cut and paste contracts are simply not worth the risk:

• Pacta Sunt Servanda – We have previously explained this legal principle which means “agreements must be kept”. Simply put, a contract you consented to will be enforced, unless there are legally recognised vitiating elements such as duress (force) and misrepresentation (lies). In the absence of such, you will be bound by what you have agreed to, and one erroneously pasted paragraph could cost you a lot.  
• Laws differ – Laws differ, both with respect to subject matter and location. The provisions of the contract you have downloaded are relevant in the country where it was drafted and intended for use, and could be of no effect in your own country. Even within a country, there are laws applicable in one state which are different from those in force in other states. Therefore, while the document may appear perfect to the untrained eye, it could be of no legal validity in your location. In such cases, that portion of the contract will not be enforceable, and sometimes the entire contract will be unenforceable and void.
• Transactions differ – In addition to issues with respect to geographical location, you may not be sure of what kind of contract you should be entering into. A contract of service or a contract for service? A hire purchase agreement or a conditional sale? In some transactions, the mode of payment and conditions attached are enough to make the transaction different from the original impression. Worse still, unclear issues as these would usually work to favour only one party, who would gladly hold on to that loophole to the disadvantage of the other party. Is your relationship with the other party a partnership in accordance with the law, or just the dictionary definition? If you don’t understand these nuances, your contract cannot adequately take them into account, and in fact you will most likely create a different kind of dispute altogether; which will be ironic considering the reason for the contract in the first place, was to avoid disputes.
• You run the risk of not being adequately protected – Standard forms downloaded off the internet were not prepared by a lawyer you have instructed, and in some cases by any lawyer at all. This makes it impossible for them to have taken your rights in the transaction into proper consideration. It is in fact possible to have a contract which subtly shifts liability away from the other party and places most of the risk on you. Clauses and warranties required for adequate protection could be left out, and an unsuspecting businessman would download such a contract, blissfully unaware of the absence of vital clauses.

“When you download contracts agreed by other people in their business deals, you bind yourself by their rules despite not being in their shoes.”

• You could actively put yourself and your business in jeopardy: When a contract was not drafted with your situation in mind, attempts to edit and adapt it to your situation without proper knowledge can result in major discrepancies between your intentions and the actual position of your rights and obligations. Imagine signing an agreement that a one-off service provider is your partner or agent, and authorized to take on liabilities on your behalf. Where inconsistencies and ambiguities exist, time wasting and expensive disputes eventually become inevitable; not to mention the fact that ambiguities will be resolved in favour of your opponent (the party against whom the contract was drafted).  Furthermore, most contracts contain a “no oral modification” provision, which generally means that nothing that you orally agreed to is legally a part of the deal. This makes it easy for any party to deny something he agreed if you haven’t been careful to include it in the contract, or you have included it ambiguously (in a way that is open to several interpretations).

The list could go on, but in summary, as with many things in life, we get what we pay for. Just like your clients are likely to end up wishing they took your professional advice, you are likely to end up wishing you had consulted a lawyer in the negotiation, drafting and review of your contracts.

What is worth doing is worth doing well, and your contracts should not be an exception!