Contract forms are used to assist you with contracts commonly used by a small business, enabling you to do it yourself without paying an attorney to put the contract together each time. However, you need to be careful when using a form or template because contracts are legally binding and many times it's still a good idea to have a legal professional look them over before they are signed.

Commonly Used Business Contracts

Since forming a small business and managing its daily operations can involve an overwhelming number of forms and contracts, such as invoices and employment agreements, it's a good idea to become familiar with the type of paperwork you will encounter frequently. Some examples:

  • Startup business loan applications
  • Employment contracts and agreements regarding compensation
  • Consulting agreements
  • Non-competition and non-disclosure agreements
  • Anti-discrimination and anti-harassment policy agreements
  • Employment termination contracts
  • Accounting forms
  • Financial forms and contracts
  • Credit and debt collection forms and contracts
  • Contracts regarding mergers and acquisitions
  • Sales contracts
  • Government business contracts and forms
  • Business closing and dissolution forms

An entrepreneur will frequently need to deal with legal forms and contracts, no matter what their venture may be. Some of these require the assistance of a trained legal professional, while others are simple enough to handle yourself, but even the simple ones can benefit from an attorney's oversight. It's well worth the investment to hire an attorney to ensure your contracts and other legal paperwork serve to prevent problems, as intended, instead of causing them. 

Can You Use a Free Contract Form?

It only takes a quick web search to turn up many different sources for free contract forms and templates. Using these seems like a great way to save money on attorney fees. When an attorney says not to use one of these, it's easy to imagine that attorney just wants your business. However, the attorney is honestly trying to help, because they have seen the problems that can be caused by pre-written contract forms.

There are several reasons that business owners should reconsider using a downloaded free legal form instead of hiring a professional, licensed attorney:

  • You might choose the wrong form. Sometimes it's hard for a layperson to understand legal details, and the name or title of the form is not always clear. Selecting the wrong form can create serious problems, or at the least, fail to provide the protection intended.
  • You might unknowingly eliminate the possibility of arbitration if the deal doesn't work out. An attorney can make sure to include an arbitration clause that allows for this option. Without it, you may have no recourse other than to go to court, which can be expensive and time-consuming.
  • You might not understand your rights. Many contract forms do not fully explain the law and the rights that the parties have, resulting in higher fees or unnecessary risks.
  • You might be unaware of gaps in your knowledge. Without a full understanding of the law, you may be unaware of important clauses, loopholes, or risks that an attorney can catch and explain. If a matter should go to court, the judge rarely accepts ignorance as a defense.
  • You might leave out something important. Pre-written contract forms may leave out language that needs to be included in your specific contract, such as dollar amounts, addresses, time limitations, and other crucial details. Without these items included, it may be difficult to enforce the contract. 
  • Your contract will not be tailored to your individual circumstances. If you use a contract that is not tailored to your specific situation, you risk ambiguity, confusing statements, or other omissions that result in unenforceability and a lack of protection for one or both parties.
  • You may neglect to account for state and local regulations. Not all states have the same laws regarding business contracts and transactions. Using a contract written for use in one state may create problems in another. 

If you do choose to use a contract template, we advise that you at least hire a lawyer to review the form for accuracy and appropriateness to your needs. Many people have found that dealing with problems caused by do-it-yourself, pre-written contract forms are not worth the potential financial savings. They may result in delays, additional paperwork and research, and expensive legal fees.

If you need more information or help with contract forms, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.