Risky Business: Writing Your Own Legal Documents Can Be Costly

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by Thomas P. Malone
Spring 2006

A client recently presented me with a document in which he had written that his employment with his corporation, which he had founded, was “at will”. He was shocked to learn this meant his corporation could fire him at will. He thought it meant he could leave whenever he wanted but he could also stay with the company for as long as he wished.

Another client filed and served a Mechanic’s Lien (giving those who work on real estate a lien on that property for the value of their labor and materials) which included required language about subcontractors, but also added additional language which in essence gave the homeowner an argument that the company providing the work was not the company filing the lien.

Both of these examples represent the kind of problems that can arise when people attempt to draft their own legal documents. Many people, in order to avoid legal fees, use so-called “forms” sold by commercial firms. The irony is that in so doing, they may end up costing themselves far more than they were trying to save.

Lawyers can be expensive. No one knows that more than we who practice law and bill clients for our services. The modern American business environment, however, mandates you know what you are doing and can cause hardship for those who do not.

Many times words used in legal documents can mean something else altogether from common usage. In the case above, the words “at will” do not simply describe the ability of an employee to leave a place of employment, the United States Constitution assures that right, but it can also describe the ability of the employer to fire that employee “at will.”

Most people running their own business or engaged in their personal affairs run into legal documents from time to time. Of course, it is probably not prudent to hire legal counsel whenever you sign a legal document. But you should develop a general guideline for when to “do it yourself” and when to hire counsel.

The most important rule to remember is you must read every legal document thoroughly from beginning to end: every word of it. The law does not care whether you actually read what you sign, you are held to what you sign. Additionally, if you are not absolutely sure you understand the legal meaning of the words you read, get a lawyer.

This is true, maybe especially true, for those so called “forms.” Many of the books those forms come from have been written by lawyers and use legal terms with legal meanings. You will be held to those meanings and you are expected to understand all aspects of them.

This understanding extends to the courtroom and means that even if you want to tell the Judge, “But I thought it meant…,” you might be out of luck. It may work if you can show the document was somehow ambiguous, but if the document expresses a clear meaning “within its four corners” your intention does not really matter. The law ascribes an objective intent to the words. In other words, the law will use its meaning and you will be held to that meaning.

It can be difficult to know when to invest in proper legal counsel. Hiring a lawyer can be a costly proposition; not hiring one when you should of could cost you more.

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