Why Are Written Contracts Important? Is It Safe To Have Your Contract Drafted By Yourself? – Part 2

Is it safe to have your contract drafted by yourself?

We have already established the necessity to have your contract to be put in writing in Part 1 of the Article. The next issue arises as to can you draft your own contract? Is it safe to do so?

First of all, any agreement made between two or more parties are contract if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object as explained in Section 10(1) of the Contracts Act 1950. This includes any oral contract and even a handwritten contract. So, yes, you can write your own contract and it is totally valid.

Having said that, this doesn’t mean you should write your own contract. You can try, but that doesn’t mean you should. So, what are the dangers of self-drafting a contract?
1. It may not be a valid contract- A valid contract must have five key elements, which is offer, acceptance, consideration, intention to create legal relationship and certainty of terms. If there is not a clear statement of what is being agreed to, in that the subject matter of the contract is too vague to be enforced or the consideration is not described plainly or there is no consideration provided, then a contract may not be valid and enforceable. For instance, A intend to offer for sale his property in Mont Kiara to B but failed to provide the particulars of the title of the property for correct identification in the contract. This will render the contract to be void.
2. The contract may leave out key provisions– Drafting you own contract may leave out the key provisions and clauses that protect your rights and interest. You may miss out some important clauses or obligating yourself to something unnecessarily thus create an accidental legal obligation. Contracts created with online templates are often overly broad or vague and fail to provide specific details and provisions. For example, a sale of goods contract requires very specific details and provisions that allocate loss and liability with clauses such as price and payment, delivery, passing of title and risk, enforcement and remedies etc.
3. A self-drafted contract may not foresee all the issues and complications that might arise– You may not be able to foresee issues and complications that might arise and may not be able to clearly explain what will happen if one party doesn’t follow through on their responsibilities under the contract and how disputes are to be resolved if and when they arise. A contract that is badly worded or ambiguous can be problematic.
4. You may be mistake as to the identity of the other parties– You may not be contracting with the parties you think are contracting with. For example, the self-drafted contract may fail to make it clear the legal entity that is entering into the contract (a person or company), or the identity as to the other contracting party who are required to perform their obligations in relation to the contract.
5. You may be mistake as to the identity of the subject matter– You think you are agreeing to Y when actually you are agreeing to X. Such mistakes usually arises where one party intends to deal with one thing and the other with a different one. For instance, A intends to offer for sale his property in Mont Kiara to B but B believes that A is offering property in Publika which is also owned by A.
6. Legal language can sometimes differ from everyday language– Legal language has a unique vocabulary that makes it different from everyday speech and writing and is difficult to understand. Some recognizable words take on different or new meanings when used in the law, for instance, “consideration” in contract law, has nothing to do with thoughtfulness. It means something of value given by a party to an agreement.
7. Failed to tailor the contract to your specific situation– The problem with using free online template is these agreements fail to address legal issues unique to the particular transaction in question. These free templates may still contain clauses that are unrelated or may be from a different country altogether.

Conclusion

In conclusion, can you write your own contract? Yes, you can. However, can you write a “good” contract yourself? The answer seems to be “No”. It’s very important to point out that once you have signed the contract, you are legally bound to those terms no matter how badly the self-drafted contract is worded or how ambiguous the contract is. It is worth mentioning that it costs far more to solve problems that could have been prevented by paying a lawyer to draft a contract correctly in the first place.

Click Here for part 1.