This Lifehacker post attempts to answer the question of how someone should handle befuddling legal documents, like terms of service, leases, car rental contracts, and so on.
The easy answer is in the article: of course you should read everything. The problem is that that’s not what lawyers actually say and do because it’s advice in a vacuum.
How to approach a contract is the sort of question that is, in reality, so swallowed up by the specifics that general answers of “what to do” are useless for actually helping people; what is needed is information about “why” a person should take a different approach.
So, the “whys” of evaluating contracts are better described as: the importance, including dollars, of the subject matter, the time and resources available to review, the value of the Type I and Type II risks (entering into a contract you shouldn’t or not entering into a contract you should).
I learned early on that many lawyers are very content to disclaim responsibility for certain things by saying “that’s a business issue.” It’s like a get of jail free card for legal advice. The problem is that even lawyers who exclusively represent companies on transactions and commercial agreements say this, when the reality is quite different. Lawyers typically live in a world in which there are “legal issues,” that they control and are the ultimate authority on, and “business issues,” which for them are the equivalent of ancient Greek graffiti written in chalk on the inside of a busted amphora: unintelligible and not their responsibility.
When I was a full-fledged “client,” meaning my company (meaning my partner and I) were paying the legal bills and reviewing the contracts, the truth was knocked into me like a flash of lightning: there are no legal issues — THEY ARE ALL BUSINESS ISSUES.
Every legal issue is really about risk: the risk of something bad happening traded off against some other risk. Sometimes it’s clear, like insurance contracts: I pay $x now instead of bearing the risk that all my stuff will burn up in a fire. The principles that define and qualify the risk are the legal issues. The tradeoff between them, and where to draw the line in your specific case is a business issue. Getting the line in the place you chose is a legal issue. Figuring out how thick or narrow of a line you need, and how grey the line can be, is a business issue.
That’s why contracts look different from one another, even if they’re ostensibly on the same issue.
Selling me a bicycle is different than selling a car is different from selling a fleet of oil tankers that haven’t been built yet.
We all prioritize where we spend our attention (which ultimately means our time and money). A very good lawyer can identify all the issues and possibilities and threats and concerns: the “no stone unturned” approach that is the hallmark of top-tier NYC big-firm lawyering. Some deals require that approach: the IPOs signified by the deal toys sitting on my bookshelf as I write this, or the sale of your company that will enable you to retire.
But sometimes the numbers aren’t big enough to justify fighting every fight, or the risk simply isn’t as great. Selling a money-losing company, or negotiating a payment plan to resolve a defaulted debt are situations where efficient use of resources is important under the circumstances. Great lawyers have all the skills of the very good lawyers with the wisdom to know how far to turn the dial.