Ready-made contract templates circulating online may look professional on paper, but in reality they were not written for either party. They reflect an average, hypothetical scenario — not the actual terms of your deal.
- The risks specific to the parties are invisible: Templates cannot anticipate the particular risks of a given transaction — late payment, delivery problems, intellectual property, confidentiality needs and so on — because they were never written with any specific parties or transaction in mind.
- Which law it was drafted under is unclear: It is often unknown which country's law, or which date, a given template was drafted under. A clause written for a different legal system, or under regulation that has since become obsolete, can produce an invalid or incomplete result in your own transaction.
- Gaps work against a party: A matter left unaddressed in a template (e.g. force majeure, early termination, default interest) will fall back on the general provisions of the law if a dispute arises — and this usually favours one party over the other, in an outcome neither side anticipated.
- It creates a false sense of security: A signed document that looks official gives a feeling of "I'm protected." In reality, the problem only surfaces once a dispute arises — at precisely the moment when it is too late to fix.
- It doesn't reflect the commercial logic of the deal: A good contract sets out what the parties are actually exchanging (goods, services, information, risk), in what order and under what conditions performance is due, and what happens if something goes wrong. A template text can never know the logic of your particular business.
- The assumption that it's "cheap" is misleading: Using a template appears to cost little upfront; but the real cost surfaces once the contract is tested — when payment isn't made, work is left half-finished, or one party walks away — and it is usually many times greater than whatever the template appeared to save.
A contract should be the written record of the actual agreement between the signing parties — not another party's document with the names changed.
This note is for general information purposes only and does not constitute legal advice.
For an assessment of your specific situation, please get in touch.