Using Lawyers on Business Contracts
Far too often in my practice, I am presented by clients with large contracts involving thousands of dollars for services or fees which were simply signed by the client without consulting a business attorney. The resistance of business owners against consulting a lawyer before signing substantial contract seems to be threefold:
- The business owner wants to get the deal done quickly so he can begin work and reap the expected monetary benefits of the contract;
- The owners does not believe the other contracting party will accept changes, and
- The owner’s concern regarding the cost of the lawyer’s time.
In reviewing any contract, a business lawyers’ first task is to be sure the contracts overall terms are consistent with his clients understanding. In making this analysis, the lawyer’s primary effort is to be sure the essential contract terms are clear and “Not Ambiguous”. When particular contract terms are subject to possible conflicting interpretations, problems over the course of the contract are likely to arise and expensive litigation can result. At a minimum, substantial management time becomes necessary in order to clarify contract language.
Not surprisingly, even if the business owner is negotiating the contract with a much larger company, even big company managers and their legal departments usually welcome suggested changes that clarify contract terms. These revisions allow each party to understand their respective obligations under the contract, before a conflict over the meaning of contract terms develop.
Next, a business lawyer reviewing a contract looks for any contract terms which might create unreasonable hurdles to prompt payment once services are performed. Problems with contract terms may include provisions which allow the other party to impose a very subjective standard as to whether the client’s performance is “acceptable” under the contract, or provisions that allow the other party to delay payment based on the future occurrence of events outside the client’s control.
Finally our firm’s lawyers’ fees to review a substantial contract usually ranges from $600.00 to $1,200.00, less if the contract is short, but can be more if contract negotiations are required. For our firm, usual turnaround time is forty-eight hours for review and comment. In the vast majority of cases these contract review fees by a business lawyer are a “mere drop in the bucket” compared to legal fees for contract conflict negotiations, arbitration, or litigation.
So the next time your business is considering a proposed business contract or reviewing an existing contract that is up for renewal, give us a call at McKenzie Law Associates P.C.; a quick contract review by a professional with over thirty-nine years of contract review expertise can save thousands of dollars in the long run, and increase the likelihood of a mutually satisfactory contract performance experience.