Unraveling the Pitfalls of Lengthy and Legalese Contracts
Contracts play a crucial role in various aspects of our lives, from business agreements to consumer transactions. However, the prevalence of lengthy and legalese contracts has become a significant issue in today’s society. These contracts, filled with complex language and convoluted clauses, often create more problems than they solve. This article aims to shed light on the problems associated with lengthy and legalese contracts and explore the need for clearer and more concise agreements.
Lack of Accessibility and Understanding
Long and legalese contracts present a significant barrier to accessibility and understanding for the average individual. The excessive use of legal jargon, complex sentence structures, and intricate terminology makes it challenging for people without legal expertise to comprehend the terms and conditions. This lack of accessibility leads to confusion, frustration, and an imbalance of power between the parties involved.
Inequality in Negotiating Power
Lengthy contracts tend to favor the party that drafted them, often leaving the other party at a disadvantage. The voluminous nature of these contracts, coupled with their complex language, makes it difficult for individuals or small businesses to negotiate or make changes to the terms. This inequality in negotiating power can lead to situations where one party feels coerced or forced into accepting unfavorable terms, potentially leading to disputes or legal challenges in the future.
Time-Consuming and Burdensome
Reading and understanding lengthy contracts can be a time-consuming and burdensome task, particularly when they contain countless pages of dense text. Many people simply do not have the time or resources to thoroughly review every clause and provision, leading to a lack of informed consent. As a result, individuals may unknowingly agree to terms that are not in their best interests or fail to identify potentially harmful clauses buried deep within the contract.
Ambiguity and Vagueness
Legalese language often introduces ambiguity and vagueness into contracts, leaving room for interpretation and disputes. These contracts may use overly complex language or include multiple clauses that contradict each other, leading to confusion and uncertainty about the rights and obligations of the parties involved. Ambiguity can also be exploited by unscrupulous entities to manipulate or deceive unsuspecting individuals.
Detrimental Effect on Consumer Rights
Lengthy and legalese contracts can have a detrimental effect on consumer rights. Consumers are often presented with contracts containing binding arbitration clauses or waivers of important rights and remedies. These provisions limit an individual’s ability to seek legal recourse or resolve disputes through the court system, further exacerbating the power imbalance between businesses and consumers.
Conclusion
The prevalence of lengthy and legalese contracts poses significant problems in our society. They hinder accessibility, diminish negotiating power, and create an imbalance in legal understanding. It is crucial for businesses, policymakers, and legal professionals to recognize these issues and work towards creating contracts that are clear, concise, and easily understood by all parties involved. By simplifying and streamlining contracts, we can promote transparency, fairness, and empower individuals to make informed decisions while protecting their rights.
Video Transcription
Why Do I Hate Long Contracts With Legalese?
The purpose of a contract is to put in writing the agreement of the parties. And so, if you have a very long contract signed by two entrepreneurs who are going to go into business together, and let’s imagine that contract has a lot of legalese. Usually, business owners do not have a full grasp of all the terms, and they certainly don’t understand a lot of the legalese that is in there. Many times, business owners present to me documents that are 10 to 20 pages long, sometimes 40, 50, or 100 pages long.
The Complexity of Lengthy Contracts with Legalese
I had this recently where two people were looking at going into business together. They used a template that they paid for online from one of these template services like LegalZoom, and this document was horrendous. It was over a hundred pages long. It actually was a multi-part document, contracts for this and contracts for this, and bylaws. These business owners had no idea what these particular documents meant. In fact, as I was looking at them, I realized it would take hours to read through them. And even then, I would have to sit and have conversations with these business owners for hours, if not days, to figure out if the language in there actually reflected what the business owners intended. Unfortunately, business owners often find themselves signing very long documents that they don’t fully understand. Perhaps they haven’t fully read it, but certainly, the documents don’t reflect the core concerns and interests of the business owner. So in my view, a very long document or a contract with a lot of legalese is a great disservice to business owners.
My Approach to Drafting Contracts
I will ask the business owners:
- What are you giving to the other party, and what are you getting from the other party?
In other words, what is the exchange? What is most important to you? We need to make sure that is documented here. - What are the potential problems that could arise in the future? And how does that look? We talk about what the exit plan looks like. If the parties need to leave this contract, is that process documented in the contract so that they don’t have to go to court to try to terminate the contract? And then I look at it as an attorney using my years of experience and say, what are their concerns that are not addressed here that typically would be in a contract, and what other terms are usually in a contract of this type that are not addressed here?
That is my approach to drafting a contract. So although it may have a little bit more than what the business owners would actually talk through, it is going to be things that make perfect sense when a business owner reads it, and that is the beauty of a contract when it reflects the actual concerns, goals, and terms that the business owners understand and sets an expectation for the future. So when problems arise, the business owners know where to go and what to look at in those contracts.
Conclusion
If you have any questions that didn’t get answered, or if you are watching a recording of this, feel free to put your questions in the comments section below. I would be happy to answer them. If you like videos like this where you can learn about business law and avoid some of the common problems that business owners face as they are growing a company feel free to subscribe on YouTube or any of the other social media platforms that you use And if you would like exclusive online educational content for founders and business owners you can get that at AaronHall.com/free. It includes a checklist of common problems faced by new businesses It includes videos going in-depth into some of those problems so that you are empowered to set up your company for success. Thanks for joining us today. I look forward to seeing you at the next live session.