You Just Received a Contract. Do You Need a Lawyer?

by J.D. Written by Team eLocal.
Two women in the office

Conducting business without a contract is rare these days. Whether you're signing up for utility services, buying a car or renting a home, it's almost a guarantee that you'll be required to enter into a contractual agreement.

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Retaining an attorney to look over your contracts is always a good idea, but with contracts being used for so many everyday functions, it can be difficult to know when you need an attorney to protect your interests and when you can handle it on your own.

Do You Need to Consult With an Attorney Before Signing a Contract?

Entering into a contract is a legal commitment, so consulting a lawyer to read the contract before you sign is never a bad idea. Contracts can be complicated, and unethical businesses or individuals can slip terms in there that are more favorable to themselves. Having an attorney read the contract and explain possible problem areas can help protect you.

When You Should Call a Lawyer

Although having a lawyer read a contract before signing is always a good option, it would be difficult to go through life with an attorney on call for every contractual agreement. A good rule of thumb is to read the contract first and see how well you understand it. Make sure you take the time to read everything carefully and highlight confusing parts.

If you don't understand what you're signing, it's time to call an attorney. A lawyer is also a good idea for overly simple contracts or those created outside a professional setting. This is to ensure the contract covers all the necessary terms and doesn't leave you exposed to unintended liability. You may also want a lawyer if the contract is for something unusual or involves a large sum of money.

When You Don’t Need to Call a Lawyer

There are some common situations that require contracts but rarely involve an attorney's help. General services, such as internet, cellular or utilities, will include a contractual agreement that's offered to every customer. In these situations, it's unlikely the contract includes anything nefarious, but it's still important to read through it just to be sure.

Real estate sales contracts are often done without a lawyer as well, but real estate agents and title agents are often available to explain the contract to each party. In these situations, if an agent provides false information, they retain liability for any losses suffered as a result of their error. Most agencies use contracts that have been prepared by their own attorneys to protect their clients.

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Is It Legal to Create a Contract Without the Help of an Attorney?

Most of the time, it's perfectly legal to create a contract without an attorney's help. In fact, this is common practice for those who want to save the expense of hiring a contract lawyer — especially now that contract templates can be easily accessed online. Private sales or rental agreements are often done in this way, although it's important to note the legality of writing a contract without an attorney doesn't change the risks involved.

Sometimes, state laws may require an attorney for certain types of contracts to ensure people entering these agreements understand their rights. Many states require an attorney for real estate purchases. Lawyers are also commonly required for contracts involving family relationships, such as prenuptial agreements. These requirements vary by location, so you can check local laws if you think your contract might require an attorney.

Should You Talk to an Attorney Before Writing a Contract?

It's always a good idea to speak with an attorney when drafting a contract. Contract law is meant to protect the interests of both parties and establish a legal agreement between the two. It's complicated because vague wording can be interpreted in many ways, which can reduce the protection the contract is supposed to offer. A person with no legal background may feel they can handle writing a simple contract, but they may be leaving out important considerations that a licensed attorney would recommend.

There can be exceptions if the transaction is simple enough and the risk is low for each party. The only time you should draft a contract without an attorney's assistance is when you feel the risk of the contract being successfully challenged in court equals a loss lower than the price of legal help. Even then, depending on the type of contract and your state's laws, there are sometimes legal penalties that can increase your liability if the contract wasn't properly written.

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