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Can I Create my Standard-form Contract by Starting with Someone Else’s?

Logo of LinkedIn, where Dana Shultz answered a question about creating a standard-form contractThis question was asked a few days ago (in different form) on LinkedIn. [Please note that the question is no longer available online because LinkedIn removed its Q&A feature.] The question was whether one can create a standard-form contract by starting with someone else’s standard-form contract.

The following is an edited version of the answer that I provided:

Case Outcome Depends on Facts

As is always the case with alleged copyright infringement, the outcome of the case will depend on the facts.

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The Top Ten Legal Mistakes of Startup and Early-stage Companies

I am pleased to make the article “The Top Ten Legal Mistakes of Startup and Early-stage Companies” available as a Free Download on the Downloads page.

Here are the ten mistakes that are discussed:

  1. Failing to comply with corporate formalities
  2. Pretending that employees are independent contractors
  3. Neglecting to provide and update an employee handbook
  4. Failing to establish or adhere to discipline or termination procedures
  5. Failing to ensure that the company owns its intellectual property
  6. Believing that “open source” means “no restrictions”
  7. Thinking that all NDAs have the same terms
  8. Believing that websites can unilaterally change their terms of use
  9. Using another company’s standard-form agreement
  10. Giving “family jewels” to an overseas supplier

Related post: Top Ten Intellectual Property Mistakes of Startup Entrepreneurs

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.

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.

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