Do I Need a Lawyer to Draft Contracts for My Business?

Attorney expertise can prevent common and costly mistakes of poorly drafted contracts

By Nancy Henderson | Reviewed by Canaan Suitt, J.D. | Last updated on November 29, 2023 Featuring practical insights from contributing attorneys Kenneth F. Neuman and Melissa Demorest LeDuc

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By the time a Detroit custom-home builder hired attorney Kenneth Neuman to sort out his troublesome contracts, “he was knee-deep in litigation, with one of his clients suing him left and right and for everything under the sun,” Neuman says. “There was no provision in this contract dealing with limitations on damages. Nothing provided for the waiver of a jury trial, let alone sending the parties to arbitration. And he didn’t have clear language in terms of when installments were due under his construction agreement for the management fee.”

Neuman, who often handles construction contracts, employment contracts, and other agreements as a managing partner at Altior Law in Birmingham, Michigan, resolved his new client’s lawsuit and rewrote the contract with specific protections that made the company less vulnerable to future litigation. 

Hurried or incomplete business contracts may seem harmless on paper, but they can make or break a business. 

Why You Need a Strong Written Contract

“When everybody’s getting along, the contract sits in a drawer, and nobody ever talks about it,” Neuman says. “But when problems arise—and conflicts invariably do—the written word is critical because courts will enforce the agreements as written. And the courts will impose a higher standard on business owners since sophisticated parties are expected to have understood the terms of their deal.”

“A lot of times when people end up in a problem situation, it’s because they tried to draft the contract themselves,” says Melissa Demorest LeDuc, a business attorney with Demorest Law Firm in Royal Oak, Michigan. “It’s very important to spend a few hundred bucks upfront to avoid paying thousands in litigation later on.”

Before you meet with an attorney for the first time, determine pertinent details such as deadlines and performance dates. Is this a template you’ll likely use over and over or a one-of-a-kind agreement with a particular party?

When everybody’s getting along, the contract sits in a drawer, and nobody ever talks about it. But when problems arise—and conflicts invariably do—the written word is critical because courts will enforce the agreements as written. And the courts will impose a higher standard on business owners since sophisticated parties are expected to have understood the terms of their deal.

Kenneth F. Neuman

Here are a few general tips for savvy contract drafting:

1. Avoid Legalese and Use Clear, Simple Language

The mark of a solid contract is clear, simple language, says Neuman. “You don’t need that 40-page contract in every scenario,” he says.

“If you can lay out the important terms and conditions in five to 10 pages, then do it in five to 10 pages.”

2. Pay Attention to the Termination Provisions

Pay attention to the termination wording and make sure you’re able to get out of the contract if you need to, attorneys say. Likewise, include protective provisions about the process by which you’ll get paid and automatic renewals. You want to avoid loopholes in your legally binding agreement.

A lot of times when people end up in a problem situation, it’s because they tried to draft the contract themselves. It’s very important to spend a few hundred bucks upfront to avoid paying thousands in litigation later on.

Melissa Demorest LeDuc

3. Consider Alternative Dispute Resolution (ADR) Mechanisms

Strongly consider an arbitration clause that requires any disputes to be resolved outside of court. 

“If you’re doing business-to-business especially, do you want to be facing a judge or a jury who’s accusing you of taking advantage of the little guy?” says Neuman. “Good lawyers know to put into the contract provisions about what happens if there is an issue between the owners and they’re at loggerheads.”

4. Give Yourself Flexibility for Unforeseen Events

The contracting process should be overseen by a reputable legal team that can assess the functionality of the terms of the contract.

“You want to be as specific as possible, but give yourself some flexibility in case unexpected things happen,” says Demorest LeDuc. “We need to make sure that, if something [unexpected] happens, you have a way out of the contract or a way to modify it. Things we may not have concerned ourselves with so much before suddenly are big concerns.”

If you need help drafting a business contract or other legal document or need to take legal action for a breach of contract or other legal issue, visit the Super Lawyers directory to find an experienced contract attorney in your area for legal advice. When choosing a contract lawyer, interview several to ensure you click, and seek someone who understands your industry, says Demorest LeDuc.

For additional information, see our overview of contract law.

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