When a legal agreement isn’t binding

When a legal agreement isn’t binding

The hidden and costly dangers of DIY legal templates

We all know that divorce and division of assets can not only be heartbreaking and time-consuming but expensive. It’s no surprise then that there has been an increase in DIY legal contracts flooding the market. However, they are fraught with hidden dangers that could see you lose a lot more than what you’d initially outlay for a lawyer. And, before you say, ‘of course a lawyer would say that – they’re afraid of losing business,’ you may want to keep reading…

In my nearly 30 years of practising family law, I have seen many clever ways to save money, as well as just as many ways to waste it. However, the trend of these templates is increasingly wreaking havoc in matters I have dealt with or read about – and it is concerning just the devastation it can create.

No matter how convincing the agreements are that you’re filling out, if not done correctly, they are not legally binding. This is particularly true with binding financial agreements which have to be constructed and signed off in a particular way, to ensure they have legal effect. If not, there simply is no agreement!

I have seen instances where a couple signed a binding financial agreement which was not in accordance with the legislation. Not only does the wife keep what the husband paid her in cash for their property, she is entitled to pursue a property settlement from him again (without returning any of the original money paid to her) because they never technically had a legally binding agreement.

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KNOW THE RISKS:

  • ONE SIZE DOESN’T FIT ALL: every situation and family is different and unique. Laws can also vary in each state.
  • You don’t know who wrote the contract: Don’t assume it was even a lawyer!
  • You don’t know your rights or obligations: The fact is, a piece of paper can’t provide legal advice therefore you won’t know all of your rights, responsibilities or risks!
  • Escalation of the problem: ‘Playing lawyer’ could actually create more conflict with the other party, which could have been avoided with mediation or arbitration.
  • Complex issues aren’t covered: Not all divisions of assets are straight forward, especially when there are businesses and off-shore assets involved. Chances are, the template won’t cover these matters sufficiently, leaving you wide open to future problems.
  • They are too vague: Not being specific enough can leave the gate wide open for future legal repercussions.
  • Incorrect legal terminology: Unless you have a legal degree, chances are you won’t be able to spot these!
  • May have outdated laws or information: The law changes often and it’s a lawyers responsibility to keep up to date with legal developments.
  • Ultimately, they can be a VERY costly shortcut!

In the instances where lawyers are contacted and asked to review the validity of these template contracts, many refuse to make amendments. This is due to the fact that the lawyer’s practising certificate is on the line. We have our own contracts that we have created, put our full faith in and trust in because we have written it and understand every inch of the detail.Essentially, if you are going to use a template and get a lawyer to check it, be prepared to throw it in the bin.

At the end of the day, the best way to avoid blown out costs and lengthy cases is to stay in control, be open and honest with your lawyer and be flexible. When emotions interfere with your judgement, it can make the process harder and more costly – in more ways than one. Would you like more practical tips to keep your family legal costs down? Read our top 10 recommendations here.

If you would like a free initial consultation or a second opinion, get in touch with us today. We service South East Queensland including the Sunshine Coast, Brisbane and Gold Coast, as well as some cases in other states.


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