What You Need to Know About the Law: Making Sense of Legal Documents, The Basics

Updated on August 24, 2016


We all need to deal with legal documents from time to time. Business contracts, wills, trusts, contracts for sale or purchase of a home, terms of service agreements on websites, privacy policies, arbitration clauses, renter's agreements, wavers. These are just some of the documents that we encounter on a regular basis.

We agree to legal terms all the time, often without realizing it. We use a website without reading the terms of service. We sign a waiver, agreeing to binding arbitration instead of litigation. We sign an agreement that allows investigation into our background without limitation for a new job.

We sign, we sign, we sign. We agree, most of the time without reading the document. Woe be to you if you sign without reading. In California, the law states that if you sign, you are deemed to have read the document that you are signing.

Read Everything First

You must take the time to read the documents you are presented with. Legal documents all contain clauses that are similar from document to document. All rental agreements will contain clauses that set out the property being rented, the length of the rental term, and the costs involved. Contracts for the sale of real property are similar, but usually contain legal clauses than just those outlined above. But from state to state, these contracts for the sale or purchase of a home are remarkably similar.

As you read legal documents you will begin to notice the similarities between them. All legal documents contain "boilerplate." Boilerplate is a slang term that refers to common provisions in legal documents. Lawyers pull these provisions out and insert them as needed into all sorts of documents. These provisions will govern how the document will be used and how it will be interpreted in case of a legal dispute, so it is important to read and understand all the provisions in a document, including all the boilerplate.

Common Boilerplate Terms and What They Mean

Jurisdiction: In case of a legal dispute, jurisdiction is the city, county, state or country that is designated as the location in which a lawsuit may be filed. It is important to know when you are consenting to a shift in jurisdiction from the state you are domiciled in to another state or country.

Choice of Law: This is similar to jurisdiction. This clause states which state's or country's legal rules will be used in the resolution of any dispute between the parties.

Terms of Payment: These provisions will dictate when and how payment is to be tendered and accepted. These are common is most sales contracts services contracts.

Severability: This clause allows a court to cut out and ignore any illegal term that the contract may have in it and still allow the court to enforce the remainder of the valid clauses in the agreement.

Notices: This clause directs how all legal notices between the parties are to be handled and it also may dictate when those notices are deemed to be effective. Must the notice be in writing? Must it be sent by U.S. Mail? Is it effective when sent or when received? These are important differences and notices must adhere to this format in order to be legally effective.

Entire Agreement: Often a contract will contain a clause that states that the written agreement is the entire agreement and that there are no oral agreements outside of the written agreement. This is important and prevents an assertion that the parties agreed to something else orally.

Waiver: This clause allows the parties to give up certain legal rights such as the right to sue. It is contained in all arbitration clauses. When you sign a binding arbitration agreement, you give up the right to sue in a court of law. These clauses are so common now and many people do not realize what they are giving up when they agree to them. Our Constitution guarantees the right to access the court system. By signing an arbitration clause, you give up that right. Big business has pushed this waiver into most contracts. Know what you are giving up, or argue against the insertion of the clause.

Ask Questions

The last time I signed a contract, after I read the entire contract, I made sure that the other party answered all of my questions regarding each provision. If I didn't like the answer, we changed the terms. Not all contracts are negotiable in this way, but many are. Do not be afraid to ask all the questions that you need to in order to fully understand the document and its implications.

The Bottom Line

Read everything

Ask questions

Understand each term and its implications

Negotiate for change

Sign only when you are happy with the document.

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    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      11 months ago from California

      Thank you Martie!

    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      11 months ago from California

      Thank you Susan!

    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      11 months ago from California

      Hey Bill--thank you!

    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      11 months ago from California

      Thank you whonu!

    • MartieCoetser profile image

      Martie Coetser 

      23 months ago from South Africa

      Important information! Understanding every clause in a legal document is essential.

    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      23 months ago from California

      Mike---it is important that we stand up for our rights I think--so good for you!

    • profile image

      Deb Hirt 

      23 months ago

      More often than not, a contract is written with the best interests of the writer or agent. Beware.

    • profile image

      Frank Atanacio 

      23 months ago

      Thank you Audrey ( Legal Zoomer you ) for this useful bit of information..:)

    • ChitrangadaSharan profile image

      Chitrangada Sharan 

      24 months ago from New Delhi, India

      Very useful and informative hub though a little different from what you normally publish! But I like the change and you have excelled in this as well.

      Some of the points I knew but thanks for the details I was not aware of. I always find reading legal documents too complicated for me.

      Thanks for sharing this helpful article!

    • Faith Reaper profile image

      Faith Reaper 

      24 months ago from southern USA

      Important and helpful article, Audrey.

      I'm guilty of not always reading the fine print on my personal, which is certainly not wise, and I am a paralegal to boot!

      It is a tedious task, but one that one really needs to take time to do.

      Thank you for sharing this useful information.

    • AudreyHowitt profile imageAUTHOR

      Audrey Howitt 

      24 months ago from California

      Good for you Flourish!!

    • always exploring profile image

      Ruby Jean Richert 

      24 months ago from Southern Illinois

      Important information Audrey. What do you think about this? When I bought my last home I hired an attorney to make sure everything was in order. After everything was signed and agreed on the seller and I signed the papers. After a few months I read the LONG record and saw that the seller had kept the oil and gas rights, now, I'm sure I am not sitting on a rich oil field, but I thought the attorney should have mentioned it, do you think so? Thanks again my poet friend..

    • SusanDeppner profile image

      Susan Deppner 

      24 months ago from Arkansas USA

      Great information and advice! My husband reads all the small print, which drives people crazy when they're trying to get him through a pile of papers. A recent case comes to mind, when he had a minor outpatient surgery. It's obvious that the admissions clerks are used to people just signing on the proper line and moving on to the next one, sign and repeat. He makes them wait while he reads (he is a fast reader). Another recent example was when we bought a new car. Do you know how many documents there are to sign when one buys a new car? I'm very thankful that he has the patience to do all that reading because, unfortunately, I don't.

    • Vellur profile image

      Nithya Venkat 

      24 months ago from Dubai

      Great advice, to never sign anything before reading and fully understanding the implications. Learned about Common Boilerplate Terms through your article. Thank you for sharing and looking forward to more.

    • Rachel L Alba profile image

      Rachel L Alba 

      24 months ago from Every Day Cooking and Baking

      Hi Audrey, You brought out a lot of things I never thought of. My father used to always say read before signing. I am a lazy reader and will skip over sentences. Not a good idea after reading your hub. Thanks for sharing this information. You enlightened me.

      Blessings to you.

    • billybuc profile image

      Bill Holland 

      24 months ago from Olympia, WA

      What an interesting article from my favorite poet. I didn't see this one coming. LOL Valuable information, of course......it's just interesting to see this type of article with your name on it. :)

    • FlourishAnyway profile image

      FlourishAnyway 

      24 months ago from USA

      You and I sing from the same book of song. I have cancelled credit cards because of their new terms, I read all the 8 pt. but important health information on the inserts that come with my medications (incidence rates of side effects, contradictions for prescribing the medicine, etc.), and I have crossed out language on forms that were given to me and marked "refused to sign without modification as noted above.". Sometimes you will find shocking things if you read closely, especially the hospital documents.

    • whonunuwho profile image

      whonunuwho 

      24 months ago from United States

      Well done and very informative. We can all use this as a guide in the future. whonu

    • mckbirdbks profile image

      mckbirdbks 

      24 months ago from Emerald Wells, Just off the crossroads,Texas

      Plenty of good advice. More often than not the individual does not take the option to negotiate. I have read many a contract and advised not to sign unless a clause or two were taken out.

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