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Understand contracts before you sign them

lawgeex.com

61–70 of 93 posts

Re: Understand contracts before you sign them

#61
post #20

I'm always shocked by the number of people who don't read the contracts they sign. It's one thing if you have hundreds of pages of legalese in front of you - I can see the value of a service such as this, or hiring your own lawyer for such cases - but for a few pages, five minutes of your time max, I just don't understand why so many people don't take the time to do so. One habit I've noticed in highly successful peo…

I think there are two things at play here. 1. People perceive they don't have a choice. For example when you visit the doctor and you have to sign 12 different form/contracts. Most people believe they either sign them or don't get treated. 2. Fear of not understanding. They think they wouldn't understand they legalese even if they tried, so why even bother? Personally I don't blame them. I've read contracts that were…

I think a grossly underutilized tactic is learning the art of quickly reading and red-lining a contract. Meaning you go through line by line and cross out particularly nasty lines or clauses, or make quick edits, and then initial next to the changes. Then sign at the bottom and hand it back.

It's a habit I picked up from being in the music business for years, specifically being a concert promoter in my early 20's, where it's absolutely standard and normal practice to get a contract, red-line or change the stuff that doesn't apply or doesn't work for you, and return it. A good example would be striking language like "or for any other reason" at the end of a cancellation clause, or changing terms from perpetuity to 12 months, stuff like that.

I've since done it at doctor's offices, when renting or buying things, when signing a simple freelancing contract, and many other contexts. It's much less confrontational, after all you do sign it and hand it back to them, putting the onus on them to deal with it if it's a problem. I recommend this approach highly if you're the type to care.

Re: Understand contracts before you sign them

#62
post #23

We have the ability to calculate a rough estimate of the time required to read a given text. This means we can create a law that states that for a contract to be valid, each party must be given at least 80% of that time[1] for the contract to be considered valid. Don't want to give the necessary 30-60min? Don't write so long of a contract, or figure out a way to do without. [1] 20% is to remove any margin of error in…

I'm curious, at what point in time did you (everyone on HN) learn about contracts? Did your father or teacher sit you down one day and say "here's this piece of paper that is legally binding and here's how to understand it and here's everything you need to know about contract law and your legal obligations, etc.?"

It seems like something that is never taught yet is an ever present part of our lives. It also seems like one would have a hard time accomplishing anything today because there are contracts for everything, many with clauses one would otherwise not want to accept.

Re: Understand contracts before you sign them

#63
post #23

We have the ability to calculate a rough estimate of the time required to read a given text. This means we can create a law that states that for a contract to be valid, each party must be given at least 80% of that time[1] for the contract to be considered valid. Don't want to give the necessary 30-60min? Don't write so long of a contract, or figure out a way to do without. [1] 20% is to remove any margin of error in…

I'm curious, at what point in time did you (everyone on HN) learn about contracts? Did your father or teacher sit you down one day and say "here's this piece of paper that is legally binding and here's how to understand it and here's everything you need to know about contract law and your legal obligations, etc.?" It seems like something that is never taught yet is an ever present part of our lives. It also seems lik…

There are three levels to understanding contracts.

1) The language itself.

Contracts are written in English (at least in the U.S.), so anyone with a strong understanding of English can read one top to bottom and comprehend what it is saying.

Experience in analyzing writing (like from a few college English courses) can help a lot, both in learning to quickly parse sentences, and in learning to infer motivations from the language on the page. You always want to be able to answer "why did they write it this way? What are they trying to get?"

2) What is typical and standard in contracts.

You can only get this from experience--from reading a lot of contracts--because it's often industry-specific.

For example, many software contracts, even 6 figure enterprise deals, include an ALL CAPS DISCLAIMER OF LIABILITY. THIS SOFTWARE IS OFFERED AS-IS AND WITHOUT WARRANTY. WE DON'T GUARANTEE THIS WILL WORK FOR YOUR PURPOSES, OR INDEED, WORK AT ALL.

I'm exaggerating, but not by much. This is a totally standard clause in the software industry, so whether or not you like it, you generally just have to swallow it if you want to do the deal

Likewise, most EULAs are very similar to one another. Once you've carefully read a few of them, you can quickly skim for the important bits (copyright, liability, data sharing) on new ones.

3) What the law says.

Contracts can't break the law. For example a contract that contains lies would be fraudulent. A contract that says you need to speed or drive drunk is not enforceable. A contract that says you can commit murder would not protect you from prosecution.

This is probably the hardest area to build knowledge, without going to law school. For me, it has helped to read news stories and good forums like HN. For example, I know that non-compete clauses in employment contracts are unenforceable in California, because so many people have said so.

There are some lawyers who post here--grellas for example--and AMAs from lawyers on Reddit are helpful too.

Re: Understand contracts before you sign them

#64

As a lawyer, I am always excited to see innovation in the legal space. This seems like an interesting concept: using an algorithm to summarize a document (contract) and to flag unusual clauses. Put the document in, and out comes the legal blessing. However, I am a little concerned about the viability of this concept in terms of producing a valuable analysis. A true analysis considers the context of a document. For in…

Think of it as a first pass. Yes, you'll have to go over it again anyways, but the 'flags' it pulls out give a little bit of landmarks and a tiny bit of extra awareness that you may have missed. It's probably going to have a error rate much higher than yours, but it's errors have a chance of being not yours and it may catch things you missed. The real question is how much better of a lawyer does it make you? Can it save you 1 hour a day, 1 hour a week, 1 hour a month? And if it can, how much does that cost you in terms of billable hours or whatever your rates are like?

Re: Understand contracts before you sign them

#66
post #64

As a lawyer, I am always excited to see innovation in the legal space. This seems like an interesting concept: using an algorithm to summarize a document (contract) and to flag unusual clauses. Put the document in, and out comes the legal blessing. However, I am a little concerned about the viability of this concept in terms of producing a valuable analysis. A true analysis considers the context of a document. For in…

Think of it as a first pass. Yes, you'll have to go over it again anyways, but the 'flags' it pulls out give a little bit of landmarks and a tiny bit of extra awareness that you may have missed. It's probably going to have a error rate much higher than yours, but it's errors have a chance of being not yours and it may catch things you missed. The real question is how much better of a lawyer does it make you? Can it s…

If this service is for lawyers, then it could have value. However, most lawyers pass their time costs onto their clients, so they have no incentive to be efficient. I would aim at corporate lawyers, although it's a very small market.

Re: Understand contracts before you sign them

#67

As a lawyer, I am always excited to see innovation in the legal space. This seems like an interesting concept: using an algorithm to summarize a document (contract) and to flag unusual clauses. Put the document in, and out comes the legal blessing. However, I am a little concerned about the viability of this concept in terms of producing a valuable analysis. A true analysis considers the context of a document. For in…

Fellow JD here.

I have to disagree with you re: viability. Not only does most of our work lend itself well to automation (discovery, researching precedent, and predicting case outcomes), but this particular startup is aimed squarely at the most obvious domain where humans mostly aren't needed anymore: formulating contracts. Translating boilerplate legalese into natural language and running both parties through checklists of essential elements seems like an obvious solution to an expensive problem. I really don't see why 99% of contracts can't be automated outside of high-level practice.

Nor do I really understand your examples. I can't recall the last time anyone I know hired a lawyer to sign a rental agreement, nor do I see any reason why contract software wouldn't first check that both parties are legally competent.

Finally, I'm pretty uncomfortable with the idea that "if you automate our profession, our protectionist guild will go after you." You're not wrong, and it would be wise for LawGeex to stay wary -- of all trades, the lawyers are going to fight tooth and nail to stay relevant -- but startups like LawGeex or RocketLawyer are clearly far more in the public interest than our ludicrously expensive middleman services. We may as well ban self-driving cars because the Teamsters want to keep dangerous, error-prone human truckers.

Re: Understand contracts before you sign them

#68
post #36

Earlier quoted context omitted.

I've walked out of businesses and/or offices on account of contract terms offered. There is that option.

Do you find that has a negative affect on your interactions with society? I can't imagine I could find a dentist or doctor that didn't have patient contractual obligations that I'd rather not agree to.

This is the problem, really. Don't like some terms in e.g. a mobile phone agreement? Take it or leave it. If you can't mobilize a mass of people to join you in rejecting it (you almost certainly can't, even if everyone hates the terms) your choice is to sign or go to another carrier (who will have the same problematic clauses in their contract). It'll hurt you more to be without a phone than it'll hurt the company not to take some special snowflake contract with you and get your tiny monthly payment in return. This is broadly true for loans, employment contracts, even doctors'/hospitals' contracts.

For the overwhelming majority of business interactions most individuals participate in, they're the weaker party by a large margin. The notion that any substantial portion of contracts and business agreements are being freely made between equals is a fiction. Degrees of coercion are everywhere. Consider: it's common to require candidates for low-wage jobs to take a piss test. If they say no, someone else will agree because they need the money. The business can afford to be at 98% capacity (or just overwork their employees) for another couple of days—an individual may not be able to afford an income of $0.00 for another couple of days. The job is worth more to the candidate than the (particular) candidate is to the employer. Agree, but insist your potential manager show you the results of a piss test, too? Laughed out of the room. Equals? Not even close.

Yadda yadda yadda this is the reason we have laws and don't just rely on contacts for everything. Also why unions exist (and why they must require membership, or else be largely ineffective) for employment issues specifically.

Re: Understand contracts before you sign them

#69
post #20

I'm always shocked by the number of people who don't read the contracts they sign. It's one thing if you have hundreds of pages of legalese in front of you - I can see the value of a service such as this, or hiring your own lawyer for such cases - but for a few pages, five minutes of your time max, I just don't understand why so many people don't take the time to do so. One habit I've noticed in highly successful peo…

I think there are two things at play here. 1. People perceive they don't have a choice. For example when you visit the doctor and you have to sign 12 different form/contracts. Most people believe they either sign them or don't get treated. 2. Fear of not understanding. They think they wouldn't understand they legalese even if they tried, so why even bother? Personally I don't blame them. I've read contracts that were…

It's compounded with scummy tactics too. I've had one office email me a few forms to read and sign before the first office visit. Then, when I arrive two minutes before the appointment, they give me "just one more form", which is the arbitration agreement.

Why couldn't that have been sent with the others? To pressure people into signing.

Heck, I've even had medical doctors insist that I don't need to read something before signing it, just "get the gist" so they can go ahead with the appointment.

Edit2: I almost think the world is designed around prodding you not to read the contract, by any means necessary, and then holding you personally responsible for it. Like, imagine parking garages. Try asking for a contract there and see what happens. Let's say you don't like the terms. Then what? They make everyone back out of the single lane entry while glaring at you? What about negotiating the terms? And good luck expecting them not to assert rights they can't legally get via contract.

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