Business Owners: Don’t Trust The Boilerplate In Your Contracts

Business owners enter into contracts every day. Some contracts are at the core of the work they do. Others are simply vendor agreements for coffee or office supplies. Almost every one of these brings with them boilerplate language that is often all too easy to ignore. But trusting the boilerplate language in today’s contracts could hurt your business interests in the future.

What’s Really In The Boilerplate Language You Are Skimming?

Very few people take the time to read every word of the service contracts they agree to. Internet users of all levels of sophistication blindly accept “Terms of Service” without even scrolling through them. At least one court has held that some online contracts are unenforceable when a person does not realize he or she has entered into it. Most of the time, however, clicking “Accept” or signing a quote is all it takes to agree to all the terms of that agreement, even the ones you didn’t read.

When a service contract breaks down, and a breach of contract lawsuit becomes necessary, many of those boilerplate terms can come back to haunt business owners. For example, the boilerplate language in your service contracts could:

• Require all disputes to be privately arbitrated by a decision-maker paid by or contracted to the vendor.
• Shorten the time limit to report a problem and receive compensation.
• Require formal written notice of any disputes and an opportunity to correct those problems prior to filing a lawsuit.
• Limit the kinds, or amount, of damages you can receive from a breach of contract action.
• Waive defenses based on lack of knowledge or non-disclosure of material facts.
• Set a venue for all legal disputes that is not geographically convenient to your business.

When the terms of an agreement are key to your business operating as intended, you can’t take the risk that you won’t be able to enforce them when you need to. Skilled corporate attorneys can review crucial service contracts ahead of time, and negotiate changes to the contract that protect your interests, while still allowing you to make the most of the contract.

Accidentally Overbroad Boilerplate Can Hurt Your Business Contracts

While consumers often only sign contracts written by others, business owners can find themselves on both sides of the contract creation spectrum. Many companies hire corporate counsel to draft template contracts for the delivery of goods or performance of services by the business and its employees. These contracts come with their own boilerplate language designed to help the business, manage its litigation risks, and ensure that dispute resolution happens in a way convenient to corporate executives.

Boilerplate language is often worded broadly so that can be used again and again as part of doing routine business. Generally, this allows business owners to use the same contracts, possibly with a few tweaks or different line items, to cover different customer needs. The more routine the service contract, the more of it will likely come from a template kept on the company’s servers.

However, in some cases, the boilerplate language is so broadly worded it loses its potency. For example, a service agreement for a short-term contract worker could include a non-compete agreement that effectively makes it impossible for the worker to continue in the profession. When that happens, the company runs the risk of a court ruling the contract unenforceable, leaving the business unprotected. It is up to highly skilled business attorneys to strike the right balance between protection for the company, and reasonable restrictions on the customer, worker, or vendor.

Entering into contracts may be a matter of course for many business owners, but it should not be done lightly. Careful reading of vendor terms of service and meticulous drafting of your company’s own agreements can help ensure that a later contract dispute doesn’t put you out of business.

The Cronin Law Firm has experienced attorneys to aid with whatever legal issue you’re facing. If you are a business owner looking for help with corporate contracts, contact The Cronin Law Firm today to schedule a consultation.