The curse of the 1-page contract!
Feb 16, 2012This morning I had another conversation with a client along the lines of: “I’ve agreed with the customer that we’ll just put a one page contract in place. Just the key points. Can you just knock something simple up for us please?” As someone who themself doesn’t particularly enjoy reading lengthy terms and conditions outside of my job (busman’s holiday anyone?) I do understand the attraction of a short, simple one-pager with the “key terms”. Without resorting to miniscule font though, the challenge for us lawyers, and the risk for you clients, is that by trying to minimise the content, we inevitably have to leave out wording that does do an important job. The so-called “boiler-plate” terms that are always found at the back of an agreement may look like padding and waffle dreamed up by lawyers to enable them to add an extra nought to their invoices; but there is a real risk to leaving any of them out. Picking one at random, the “Entire Agreement” clause, which generally says something along the lines of “This Agreement is the whole agreement between the parties”. A self-evident statement you may think, but leaving this clause out, in order to reduce the length of a contract can be fatal. In effect it means that if the two parties fall out, then they can, potentially, rely on conversations, sales pitches, emails, letters and any other extraneous material to claim that the other side have not done what they promised that they would do. If, in a sales pitch you said “use our software and you’ll save £000s” but then the promised savings don’t materialise, then without an “Entire Agreement” clause your customer might have the right to sue for the money that they haven’t saved! Although we would probably always, in the nicest possible way, “refuse” to leave out this sort of clause in any contract that we wrote for our clients, we have all too often seen situations where our clients didn’t get any advice on contracts and thought that it was better to make the agreement as simple as possible, including sometimes literally using only one page. The reason we get involved is usually because things have gone wrong; and without the boring, yet vital, “boilerplate” clauses the time, difficulty and cost of sorting everything out is enormous. So next time you wonder why we lawyers can’t just cut the waffle and put the salient points on one page, please spare a thought for what it would mean for you in the unlikely event that everything goes horribly wrong.