Ours is an age where legal forms proliferate and many business owners are tempted to use them without giving much thought to customizing them to their business specifications.

This is a mistake.

The thoughtless use of legal templates assumes that the law is a mechanical process, as capable of simplification as the process of selling widgets. The thought goes something like this: you find a widget on the web. You buy it for a cheap price. You use it. So there’s no need for those middleman lawyers who charge a lot to pull the identical device out of its drawer and hand it over to you with your bill.

There are some partial truths here. Some contractual situations are absolutely routine. And lawyers have sometimes abused business owners by keeping them in the dark while running up bills in simple situations. It does not follow, however, that contracts are merely widget-like interchangeable units that anyone can use in a plug-and-play fashion.

Actually, the law is a slippery beast, one that seems to defy simplification. David Dudley Field made a famous effort to simplify California laws in the 1870s. The most educated men of that era consciously set out to take all California laws and make them so simple that even the least educated person could understand them. The result: a world-class belly flop. The judges took the new streamlined layer of law embodied in the Field Codes, weaved it into a complex system of legal interpretation, and voila! — California emerged with the most complex set of laws in the nation.

Why did this happened? Why does the law so stubbornly defy being reduced to a thoughtless enforcement system that is easy to understand and administer?

Because, like it or not, the law is designed to regulate human affairs that are themselves complex. And you can’t do this effectively unless you adapt to the situations at hand. That is why judges decide issues on a case-by-case basis. This is why the law has so many localized variations. That is why a canned contract, no matter how well drafted, will be of no use to parties who adopt it without thinking through its implications.

Again, like it or not, business and corporate law is complicated. So is copyright law. And tax law. and securities law. And the licensing law. and distribution law. and property rights. And all other forms of contract and commercial law. Have you ever tried to trade an unsecured obligation? Or a revisionary interest? Or any other of the thousands of strange-sounding legal concepts that seem to float in and around the law surrounding businesses and corporations? Yes, you may be familiar from practical experience with what FOB means as a commercial shipping term. Or by what is meant by an “Implied Warranty of Merchantability”. But take those terms, multiply them by thousands, put them in an unknown context, and what do you get? You get a network of legal terms of art, each of which has a specific meaning only when understood within a complex legal context.

This is much more than a case of a lawyer trying to spread so-called “fear, uncertainty and doubt” in an illegitimate way. This is the reality of the law that tries to understand and regulate complex matters that do not lend themselves to simplification when considered as a whole.

Therefore, contract and commercial law is very complicated and does not lend itself to thoughtless application. If it was just about putting the names on, say, a partnership agreement, then anyone starting a business could go to a stationery store (the old one) or go to a form download site (the new one), buy a deal canned society, fill in the names and you’re done. This is normally an unwise way to form a company. Such repetitive form may have nothing to do with the nature of the business established by the parties. You can have language that has nothing to do with your agreement and will only confuse them and everyone else as to what your agreement was about. Worse yet, you won’t expressly state the nature of your deal to make it clear what you intend in your contract. Said contract is an open invitation to litigation in the event that something goes wrong in the deal between said parties. Perhaps they will spend tens or even hundreds of thousands of dollars going over and over again ad nauseam what they intended when they “agreed” on the poorly drafted model. If you have ever had the misfortune to suffer this fate, you will never again resort to such clippings to document the affairs of your startup or small business.

All but the simplest contracts must be carefully reviewed by someone with a discerning eye and must also be understood in their full legal context. A review of the contract, of course, can be done by an intelligent layman using self-help resources. And some people are inclined to invest time and effort for that purpose in a way that helps them manage their legal budgets more carefully because they shoulder much of the burden themselves. But it is a burden and has a cost associated with it: there is always a cost-benefit component to any such endeavor. What’s worse, many people don’t do a good job of thinking through problems and end up taking shortcuts. A contract in your hands can be like a loaded gun in the hands of a six-year-old: wildly unpredictable and sometimes dangerous results can follow.

Also, context is critical. What appears placid on the surface may hide legal turmoil beneath. Sell ​​shares to investors with a simple purchase agreement. Good. I sell. You buy. Then, later, you find out that you didn’t comply with the securities laws. Or that your buyer obtains a large taxable profit for having contributed intangible assets for his action. Or that your treatment violated the rights of someone else in the company that restricted those sales. Yes, lawyers can, and sometimes do, brood over these issues unnecessarily. But such problems can and do exist in many cases. When you use a boilerplate form, you need to see beyond its seemingly simple boundaries to understand how it works legally in its larger context. Otherwise, you could get into trouble without having the slightest idea that you are doing it.

So can you as an entrepreneur use boilerplate forms with impunity without fully understanding them and without understanding their context? In some cases, yes. You need a simple promissory note, and the generic one fits your needs without too much risk of going legally blind in a simple transaction. You need a canned nda for your employees, and you have a form that you had used at a previous company, the type of form that has remained fairly consistent over many years of use. This may work for you, and even when there are potential technical issues with the documents you are using, the issues may never arise in your particular situation.

However, for every instance where entrepreneurs can or do get away with it, there are too many situations where their attempts to do so backfire. Flying blind has its limits, after all.

Bad business attorneys are attorneys who simply take forms and change names without thinking about the nature of the deal before them. As bad as this may be, at least those attorneys have a modicum of legal education and experience to be able to spot some of the legal problems and some of the potential pitfalls.

The same cannot be said for an entrepreneur trying to do the same thing but without the benefit of a legal education or legal training. This is then the worst of all cases. Don’t put yourself in this situation.

The issue becomes confusing when the employer will have had significant exposure to certain types of legal documentation, such as in the case of someone who managed the contracts of a large company in an executive capacity while working under the guidance of experienced lawyers. In such cases, someone who has had much practical experience with a particular class of contracts is often much more aware of its ins and outs than non-specialist lawyers who have not dealt much with such contracts.

This is also true for the experienced entrepreneur who has developed such a strong working knowledge of business deals as to be able to handle without a doubt any green business lawyer trying to work on such deals.

While all of this is true, it simply means that the law has a practical side as well as a theoretical one, and any smart person who has worked on complex legal agreements often enough will come out of that experience with excellent skills applicable to those agreements. Serial entrepreneurs, contract managers, and others with similar experience fit this mold.

However, this only confirms why it is not advisable for an entrepreneur to try to do business using legal ways without thinking. The experienced entrepreneur, the skillful contract manager, etc. They may not be business lawyers, but they have the vast experience to be able to think through a complex contract carefully. Even then, such people will attest that they ultimately need to have their deals reviewed by a qualified business attorney. While they may be able to carry out a deal more efficiently due to their experience, they themselves know that this is not a substitute for using the services of an attorney who is knowledgeable in their field.

The key word is “think”. A good business lawyer will think carefully about any given deal and customize any contract for the business situation at hand. An experienced entrepreneur will do the same within the limits of the knowledge of a layman in a technical field. An entrepreneur who uses good self-help legal resources will similarly think through problems carefully within the limits that such resources allow.

It is the thoughtless use of repetitive forms that does not work. Using boilerplate forms without the necessary training, experience, and education gives the employer no basis for thinking of a deal to spot the problems and potential problems. Don’t mindlessly use boilerplate forms. In the end, it can cost you dearly.