Halloween may be a memory, but Franken-contracts might still be lurking in your drawers. Franken-contracts linger in every company. Cobbled together from a few well-recommended forms and pieced together from Big Names on the Internet, many companies use contracts and licenses for the sale of goods, software and professional or technical services. Taken together these contracts are at best inconsistent and at worst unenforceable due to ambiguities in key provisions.

 

For example, I was recently contacted by a client ("Contractor") who asked me to take a look at his contract because he was running into an issue with his customer paying its bills. The Contractor had pitched a flat fee arrangement to perform certain professional services for his customer.

 

Not surprisingly due to many factors outside of Contractor's control, the schedule was extended several times, eventually pushing back construction of a large professional building and the project's initial deadline.

 

As a precaution against this very issue, Contractor had the foresight to insert a clause that obligated the customer to pay an additional monthly fee for services performed after the deadline, regardless of the reason for the delay.

 

As you might expect, the deadline came and went and the Contractor began invoicing the additional fee. Not surprisingly, the customer objected saying that the Contractor had not completed its job, i.e. the services contemplated under the original, fixed-fee agreement.

 

The issue of enforceability is one of the biggest reasons why it's important to avoid using a "Franken-contract" that has not been vetted by an experienced lawyer. The whole point of having a contract is to have some reasonable certainty around parties' rights, obligations, remedies and enforcement of those deal terms. A contract that has been cobbled together from bits and pieces of other contracts - no matter how good those other contracts may have been - has the potential to introduce ambiguity into the agreement.

 

The biggest obstacle to enforcing contracts is ambiguity around the terms and conditions. Specifically, inconsistent definitions, duplicative but not identical clauses, and the absence of key provisions make a contract difficult to hold the other party to its obligations.