How to Read Contracts (and Everything Else) Like a Lawyer

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Scrutinizing contracts, legal documents, or actually anything that exceeds 200 words can be daunting.  Heck, I read all day long, and I still get this dreadful ache in the pit of my stomach before I embark on reading anything longer than two pages.  But here’s the thing–it’s a painful exercise, but you just have to do it.  If you want to save some money on lawyers’ fees, here are some tricks and tips to reading these documents like your attorney might.

Tip #1: Read EVERYTHING

I know, reading something completely to the end sounds simple, but it can be tougher than you think.  It’s like when you sign up for something (actually everything) on the internet, who really clicks on the Terms and Conditions link, and actually reads the whole thing through??  Just thinking about all that scrolling gives me phantom carpal tunnel pain.

Lawyers are some of the few people left on earth who actually do read everything put in front of them.  And for good reason: once executed, you will be held to every single word in that legal document you just signed. And it’s AMAZING what you’ll find when you actually just take the time to read all of the words that are there.  I routinely find spelling mistakes, old boilerplate (a.k.a. template) clauses that don’t apply to the transaction at hand, or terms that don’t quite match prior discussions.  Yes, there is a lot of legal jargon (discussed below), but you may be surprised to see just how much you can actually understand.

In addition to catching mistakes and getting a general understanding of what it is you’re signing yourself or your company up for, you will be better prepared to discuss the matter with your attorney and ask relevant and intelligent questions, thus saving time and money in fees.  And as a side note, when you’re dealing with lawyers, there ARE such things as STUPID questions, regardless of what your elementary teachers told you.  When you’re paying someone between $300 and $600 an hour to answer a question that you could have answered yourself if you had just READ a document, that is a textbook STUPID question.  So don’t be stupid.  Read everything.

Tip #2: Check Every Reference

This tip is pretty self-explanatory.  If the document mentions another document, read that other document.  Make sure its inclusion makes sense and is appropriate.  If there is a list of attachments, make sure all of the attachments are included.  If there is a reference listed, go to that reference and make sure it is consistent with the rest of the document.  Ensure every reference, footnote, attachment, enclosure, etc., tie together in a way that you understand.

Tip #3: Question Everything, Especially Things That Don’t Make Sense

Okay, I know above I said that there are stupid questions, and this is true.  But if you have read a clause, sentence, or paragraph that just doesn’t make sense, definitely question it because, remember, you will be held to every word that is in that document.

On the flip side, if the document states something that when taken at face value contradicts what the other party is telling you it means, definitely question that.  If it’s not a legal term of art, the document needs to say what it means, and mean what it says (technically, it should read what it means and mean what it reads, but the other way sounds better).  Get the wording changed so that you are comfortable with it.

Terms of art, however, are little words and phrases used by lawyers that are usually completely elusive and archaic, and the only way you know their meaning is by Googling them, or looking them up in a law dictionary.  Kinda like voir dire, which is French and literally means “to see to speak.”  In the legal world this term is associated with the proceedings surrounding a jury trial and selection.  Here in Texas, lawyers don’t even bother saying it correctly, so it’s not intuitive and there is no way the average person would ever know what it means without looking it up.  Terms like this need to be researched when you come across them.  Google is awesome.  Use it.

Tip #4: Close Any Open Ended Terms

It’s not uncommon to run across terms that specify a “reasonable” time frame, or “reasonable” quantity of something, or “reasonable” efforts.  This term is used quite a bit in legal documents, but is very vague and highly susceptible to individual interpretation.  If at all possible, put a number, date, quantity, time frame, or ANYTHING in there that is objectively measurable.

Tip #5: Imagine The Worst Case Scenarios, and Draft Accordingly

One of the things I noticed about lawyers before I actually became one was how they were always so depressing to talk to when I would ask for their opinion on anything.  They would pronounce doom and gloom and proceed to instruct me on how to prevent my dog from dying, my butt from falling off, and the end of civilization as we know it, and all because I declined my receipt at the gas pump.  Geez.

I understand this now because lawyers are trained for three years on how to protect against everything horrible and unholy that might happen 10 years from now.  Legal documents aren’t made for when deals are going well, as much as for when they go bad.  Half of the crap that goes into a contract addresses how the parties will deal with each other when problems arise.  Think about it–when’s the last time you checked your Cardholder Agreement when you used your credit card without any problems?  Probably never.  But if it got stolen and used, that’s when you whip that bad-boy out and start checking it to make sure you won’t get stuck with unauthorized charges.

So try to imagine possible ways that whatever deal you’re working on could go bad, and draft terms that will guide you and prevent conflict, in addition to outlining amicable methods to address the situation should conflict occur.

This list is just a starting point since there are so many things to consider when reading contracts and such.  I have a feeling I will be revisiting this topic again and again.  Thanks for reading and let me know your thoughts!

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