DIY legal agreements: 2 key steps before you sign

Last month the shower started leaking. Plumbers are expensive, I thought to myself, and I can't wait around, I'll just fix it myself.

I watched a video on YouTube. Called my dad, who isn't a plumber but who uses a shower and has many tools. At lunchtime I popped into the hardware and bought an impressive washer turning thingummyjig. 

You know where this is going. 

After much grunting, slipping, swearing but no stopping of the leak I called a friend and got the name of a local plumber. He came that afternoon, produced the correct tool, quickly fixed the washer, serviced the taps and couple of other jobs. I paid him his very reasonable fee with pleasure. 

I'm sure every plumber has a ton of DIY failures they were called out to fix. Unfortunately most lawyers have a few stories too. 

In the past month I've had two clients who entered agreements without getting legal advice first. Unfortunately, unlike my shower, there wasn't a quick fix. It was very much more expensive, complex and stressful to address the problem than if they had consulted a lawyer in the first place. 

With widespread online knowledge bases and forums it is getting easier to find answers through the keyboard. A number of online comprehensive legal document providers offer DIY legal agreements at attractive prices. My Scottish heritage means I hate wasting money so I understand the attraction. It may be that I only see the ones that go wrong but some problems I have seen in DIY documents include naming the wrong legal entity, mistake on the due date for a key term, reference to defined terms which are meaningless and omitting parts of the deal.

No matter who prepares a legal document, here are two key pieces of advice:

  1.  don’t sign a document you haven’t read and understood; and
  2. without legal advice, you don’t know what you haven’t understood about the document you are signing. 

Just as my plumber spotted a couple of problems I didn’t know I had, a lawyer is trained to identify and minimise the risk of future problems.  

Once you sign a contract, you are stuck with it. Before you sign, think about:

  • is another party preparing the legal documents because they have more experience with commercial contracts or have legal training? Do their interests differ from yours?
  • have you read all of it?
  • are you handing over something valuable (goods, services or your idea) before getting paid in full. If you are counting on getting a considerable amount of money in the future from the other party(s) to the agreement how are you protected if they don't pay up?
  • if you are entering the agreement jointly with others, will your obligations increase if the others fail to do what they have promised. Is there a cap?

If you can’t afford to take the risk that others don’t uphold their side of the deal, then can you afford to sign an agreement without first getting legal advice?

 I help business owners resolve disputes in a way that minimizes the disruption and expense those disputes can cause. I share posts regularly and tweet @BreakupBusiness. If you wish to keep up to date with issues affecting setting up, and breaking up, businesses follow me