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How detailed should a legal document be?

This topic was suggested by Tim Greene at FizzTalk based on a comment posted at the LinkedIn Legal Blogging group.

In my experience, a document’s level of detail should be driven by the nature of the business transaction and the parties’ relationship. I will give some examples both from in-house work and from my private practice that pertain to agreements with independent contractors.

Long and Detailed

When I was VP and Legal Counsel at Visa, I negotiated hundreds of contracts. Given that most were for IT products or services, a lot of money often was at stake, especially if a relationship was to continue for a period of years.

Accordingly, I prepared a series of detailed standard-form agreements – typically 15-20 pages – that served as a starting point. To minimize the amount of negotiation that would be required, the agreements were reasonably balanced, yet they, nevertheless, protected my client’s essential business and legal interests.

The agreements were long, but the length was justified by (a) the size of the deals and (b) the fact that each standard-form agreement would be used many times in the future, with minor revisions as required.

Short but Sweet

At the other extreme, last year I prepared a simple one-page (albeit with a small font) independent contractor agreement, and an accompanying one-page Statement of Work form, for a nonprofit organization that needed to procure some professional services. The short document was justified because relatively little money was at stake, a simple assignment of intellectual property rights sufficed, and a lengthy agreement would have been too formal (and too expensive, from the perspective of legal fees) for the nature of the parties and their relationship.

Interestingly, I adapted this agreement, a year later, for use by another client to help get a website business off the ground – please see Beware the Unintended Partnership.

In Between

Nowadays, most of the independent contractor agreements that I prepare for clients fall between the foregoing extremes. More than a page or two is required because of the value of the services to be provided, a need to address intellectual property rights in detail, or other considerations. On the other hand, a 15-page agreement often would take too long to prepare and negotiate, frustrating the parties’ desire to move their business relationship forward as quickly as possible. Most end up in the range of 6-8 pages.

Related post: Should I Initial Every Page when I Sign an Agreement?

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Dana H. Shultz, Attorney at Law? +1 510 547-0545? dana [at] danashultz [dot] com

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

Categories
Contracts
  1. 7/28/2009 | 7:30 pm Permalink

    A slightly more-detailed version of this post is on FizzTalk (http://fizztalk.fizzlaw.com/post/How-detailed-should-a-contract-be.aspx).

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