Template contracts that are cheaper in the short term could expose brokers to costly litigation in the long term, a lawyer has warned.
Alexandra McVay, a senior associate at Rodgers Barnes & Green Lawyers, said brokers could be assuming legal risks for which they were unprepared if the template lacked certain provisions.
“A template contract may have all the headings and structure that your business contract requires but your contract may need provisions for warranties, indemnities and guarantees drafted that the template contract doesn’t contain,” she said.
“The legal document may be unenforceable, you may lose your rights, you may not have complied with your legal obligations and ultimately this may lead to litigation.”
FBAA chief executive Peter White urged brokers to heed Ms McVay’s advice.
“I know that many brokers use generic templates, but there are several contracts – including Privacy Act documents – that should be specifically tailored to one’s own business,” he said.
