How to use a legal template and manage your risk

By Vivian Michael | Startup Contracts

How to use legal templates and manage your risk

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Can you use a legal template and manage risk?

Yes. And I'll explain how in this article.

Templates - whether once customised for you by a lawyer or a recent template download, can be helpful when you are in a bind. 

Here’s what you need to know about how to use legal templates and manage your risk.

In a hurry? Jump ahead. 

Online template purchases

Some online templates are available as free downloads and others are paid.

Either way, make sure that the template is from a lawyer, and if you can’t find this out, I don’t recommend using the template.

Schedules

Templates that are built with schedules are the best.

Why?

Likely, if the lawyer has done a good job, you’ll have a schedule to update and signature blocks - and that's it. 

And, hopefully, you won't need to mess around with the body of your contract. 

Below is an example of a schedule for a client agreement. This one was at the front of the client's contract to make life easier.

Schedule Example - Client Agreement

Deed or agreement?

You’ll need to know when to use a template deed or template agreement.

And you can read about that here.  

But in a nut shell, you’ll use an agreement if money is changing hands and you need the flexibility of e-signatures.

And, you’ll use a deed if money is not changing hands e.g. prospective business partner. 

Other times, you may use a deed because you want a longer time frame to enforce it (between 12 to 15 years in Australia). 

You'll need to use the right one (agreement or deed) so it's enforceable.

So, be sure to get advice if you're in doubt.

Signature blocks

You’ll need to know which signature block to use because they're different for sole traders, companies and trustees. Don't worry, I've got the example blocks for you in the links below. 

For now, this is what you need to know: 

Agreements and deeds are signed differently.

And, without taking you through all the detail here, you can e-sign an agreement, but you can’t e-sign a deed.

Also, these words need to be written above a deed signature block: ‘signed sealed and delivered’ and while you don’t need these words in NSW, its best practice to use them in case you use your deed interstate.

If all this sounds confusing, don't worry, these popular reads below are going to get you on track for how to sign agreements and deeds correctly in Australia:  

Deeds - how to sign a deed correctly; and 

Agreements - how to sign an agreement correctly

Previous templates

You can use previous templates if you need to, just know which sections you need to update and you're good to go.

Future contract preparation

A good lawyer can help you setup some of your agreements as reusable templates.

And, I say some because some agreements cover very unique circumstances which are unlikely to repeat.

Also, a good lawyer will make your life easier by giving you a schedule to update so you aren’t making changes in the body of the agreement.

Don't touch the body of your contracts!

Above, we talked about schedules being an area of your contracts you can adjust, because they're usually set up that way. 

But, you should avoid adjusting the body of your contracts.

Why?

In short, you're more likely to mess things up.

And I'm not talking about the clause you're adjusting, but other clauses that reference the clause that you've messed up! 

So assuming you have correctly only adjusted the schedule, the signature block is another area you should possible adjust.

Signature blocks

A selection of signature blocks at the end of your contract can help you greatly when your contract recipient can either be a sole trader, company director or trustee. 

And, if you have a template that does not have these, I have good news for you - you can get them below: 

Deedshow to sign a deed correctly; and 

Agreements how to sign an agreement correctly

Contract review service

Your lawyer may be able to review your contracts before you re-use them and this might be more cost effective than a re-draft.

Here's my personal policy for a review service: 

 If I am looking at a contract or document that was prepared by a lawyer, then I'll likely offer a review service.

If I am looking at something that was a freebie download - I'll likely not offer a review service but a re-draft service.

Why?

Because if the quality is so poor that so many clauses need to be restructured, it's likely to be more cost effective and efficient to scrap and restart.

Also, legal changes may be another reason to scrap and re-draft, we'll cover that issue next.

Legal changes

Contracts and legal documents may need to change if there’s been a change in the law.

A classic example is the GDPR impact on your privacy policy.

If your'e collecting details from EU residents your privacy policy needs an update - a tangent but an important reminder! 

Finally, I hope this helps you. Leave a comment or feedback below if you like and I wish you every success in your ventures! 


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About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to entrepreneurs launching in Australia that would otherwise DIY, rely on legacy contracts or go without.

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