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ARE YOU SURE OF WHAT YOU’RE SIGNING?
By Daniel Sitarz

LEGAL FORMS AND YOUR BUSINESS
The business arena in America operates on a daily assortment of legal forms. There are more legal forms in use in American business that are used in the operations and governments of many foreign countries. The small business is not immune to this flood of legal forms. The legal system in America has a profound impact on the operation of every business, from the giant multinational corporation, your indoor kart racing center down to tiny one-person enterprises.

While large corporations are able to obtain and pay expensive lawyers to deal with their legal problems and paperwork most small businesses can not afford such a course of action. Whether it is in the form of signing a lease for office space, obtaining a contract for work or accepting a shipment for goods, the small businessperson must deal with a variety of legal documents nearly every business day, without the aid of an attorney.

Unfortunately, many business people who are confronted with such forms do not understand the legal ramifications of the use of these forms. They simply sign the lease, or contract, or bill of sale with the expectation that it is a fairly standard document, without any unusual legal provisions. They trust that the details of the particular document will fall within what is generally accepted within the industry or trade. In most cases, this may be true. In many situations, however, it is not.

Our legal system is clogged with cases in which businesses are battling over what was really intended by the incomprehensible legal language in a certain contract.

Much of the confusion over business legal contracts comes in two areas. First, there is a general lack of understanding among many in business regarding the framework of contract law. Second, many contracts are written in antiquated legal jargon that is difficult for even most lawyers to understand and nearly impossible for a lay person to comprehend.

Despite lofty argument by attorneys regarding the need for such strained and difficult language, the vast majority of legalese is absolutely unnecessary. Clarity, simplicity and readability should be the goal in legal documents. In most business contexts, buyer and seller or landlord and tenant or some other straightforward term of definition of the parties involved is possible.

Many people believe that lawyers prepare each legal document that they compose entirely from scratch. Nothing could be further from the truth. Invariably, lawyers begin in their preparation of a legal document with a standardize legal form book. Every law library has multi-volume sets of these encyclopedic text which contains blank forms for virtually every conceivable legal situation. Armed with these pre-prepared legal forms, lawyers, in many cases, simply fill in the blanks and have their secretaries re-type the form for the client. Of course, the client is generally unaware of this process. As the lawyers begins to specialize in a certain area of legal expertise, they compile their own files containing such blank forms.

Of course, the use of prepared legal forms is available to the small business owner, too. Available in book form at your local bookstore, stationery stores and on the Internet, these forms are intended to be used in those situations that are clearly described by their terms.

ABOUT THE AUTHOR: Daniel Sitarz is an experienced business attorney, and author of many business legal reference books including “The Complete Book of Small Business Legal Forms”. He is licensed to practice law before the Supreme Court of Florida, the Supreme Court of Missouri and the United States Tax Court.

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