In today’s world, there is no way to avoid dealing with contracts, legal agreements, documents and other legal instruments on a regular basis, especially if you own a small business. When we need to put something in writing to formalize a commitment or agreement between two or more individuals or businesses, our chief concern is that it is legally enforceable if any parties to the agreement fail to comply with its terms and conditions. Another major consideration is the cost of putting the relevant terms and conditions into writing. Before deciding whether to create an agreement ourselves; use a legal form; or hire an attorney, we want to make certain that the end result will be legally valid and enforceable.
For all of us non-lawyers, getting a simple answer to even the most basic legal question can be as difficult as it can be expensive. Sometimes it seems as if there is some sort of conspiracy to keep us from being able to meet our basic legal needs more simply and inexpensively so we can save our legal dollars for more complex matters. So, what we really want to know is how to legally protect ourselves in the most cost effective way possible. So, what makes a legal agreement valid and enforceable?
That sounds like a pretty easy question, right? Wrong! My interaction with the legal community began while I was still in college and worked part time as a paralegal doing title work. Although I had taken some paralegal courses, I received my practical training from both a junior attorney and an experienced paralegal at the firm where I worked. The quality of my training differed substantially depending upon who was doing the training. Whenever I asked the attorney a question, I would get long lectures but few direct answers. For meaningful training, my time was much better spent with Anita, the paralegal, who always gave me real answers to my questions so I could do my job.
In the decades since my work as a paralegal, I have hired countless attorneys for both business and personal matters. From time to time over the years, I have attempted to get various attorneys to give me a straight forward answer to that all important question – what makes a legal instrument legal and enforceable? I don’t know whether it’s because lawyers take a secret oath like magicians to never to reveal the secrets of their profession or some other unfathomable reason, but every response I received reminded me of the non-answers I used to get from the young attorney from my paralegal days. That is, until recently, when I met a highly regarded and newly retired attorney who had specialized in contract law. He shared the following with me:
- If he were give three written agreements (a) one written collectively by the justices of the U.S. Supreme Court, (b) one a pre-created form, and (c) one written in crayon by the parties to the agreement, he couldn’t proclaim ANY of them to be valid and enforceable. He explained that only the courts had the legal capacity to declare either all or part of an agreement to be legally valid and enforceable. Further, the courts get involved only if an agreement is legally challenged by one of the parties or an outside entity with legal standing (something that the court also decides). If no one challenges an agreement and all parties abide by its terms and conditions, the subject isn’t relevant
- No matter who creates a legal agreement, it can be challenged at any time, for any reason.
- The more “plainspoken” and clearly written the document is, regardless of who created it, the more likely it is that the courts will uphold its terms and conditions if challenged.
The bottom line is that paying an attorney to draft simple contracts and agreements is no silver bullet and the premium you pay is no assurance that it would be upheld as “legally valid and enforceable” if challenged.
Now that I have a better understanding of the issues involved, I have been much more willing to use pre-created forms. I also am now more likely to create my own simple agreements and authorizations when the circumstances are appropriate. There are many alternatives to consider when deciding what approach to take when addressing your legal needs. Take the time to consider the various tools available before deciding which solution best fits your circumstances and budget.