It makes sense for California business owners to find ways to cut costs, keeping their profits in-house. One way some business owners and executives look to do this is to draft their own contracts. After all, you know what the contract needs to say and what both parties are agreeing to, right?
The challenge is that while it may save you money upfront, it could be costing you significantly down the line. In California, the laws around business contracts can be strict and vary, especially when you work in a regulated industry. Using the wrong wording or leaving out required terms could make the contract unenforceable. Worse, it could leave you exposed to lawsuits, fines, or both.
Business owners and executives don’t always realize how specific the rules can be. In some industries, the law spells out exactly what your contract must say, how it must be structured, and what rights it must give the other party. If your agreement doesn’t check all the boxes, you may not be able to rely on it when a dispute arises.
Contract Templates and Boilerplate Language Could Prove Costly
At first glance, using a standard contract template seems practical. You get a document that gets the job done by covering the basics. But when you’re running a business in California, those shortcuts can come back to bite you.
Potential legal pitfalls of generic, boilerplate language can include:
- Templates Fail to Capture the Actual Agreement
Most templates aren’t written with your industry in mind and won’t capture the nuance of the agreement(s) you’re entering. California has detailed rules for certain industries and business types, and a generic agreement likely won’t include the disclosures or cancellation terms those laws require.
- Broad Language is Often Unenforceable or Leaves Room for Interpretation
The language in templates is usually too broad. Important terms, like how services are defined or how disputes will be resolved, may be vague or open to interpretation. That ambiguity gives the other side room to challenge the contract if things go sideways.
- Generic Contracts May Not Account for the Grey Areas
Any boilerplate contracts leave out key protections. Whether it’s how you get paid, what happens if a client disappears, or who owns what, these details matter, and they need to match how your business actually works.
- Templates or Boilerplate Language May Not Even Be Legal
Some template language simply doesn’t line up with California law. What’s acceptable in another state could violate public policy here. Without tailoring the terms to fit local requirements, you could end up relying on a contract that doesn’t hold water when it matters most.
Do Your Contracts Meet Industry Standards and Regulatory Requirements?
Not every contract is treated the same under California law. Depending on the type of business you operate, there may be extra requirements you have to meet. These aren’t optional, and failing to follow them can put your entire agreement at risk. For example:
Private Investigator Agreements
If you’re a licensed private investigator in California, your client contracts must follow strict legal standards. You’re required to list your license number, describe your services clearly, explain how you charge, and outline when and how any reports will be delivered. Any vague or missing terms could make the contract unenforceable. As of July 2025, even more rules will apply, making now a good time to revisit and update these agreements with legal support.
Health Studio Contracts
Fitness businesses, personal trainers, and wellness centers fall under the state’s Health Studio Services Contract Law. These contracts come with caps on how long they can last and how much you can charge. They also must include a cancellation period and refund rules. Even a minor oversight (like omitting the five-day cancellation clause) can nullify the whole agreement. On top of that, if someone was misled into signing, you could be liable for triple damages and attorney fees.
Rely on Sound, Enforceable Contract Language to Protect Your Business
California courts won’t hesitate to rip up contracts that fail to meet basic industry and regulatory standards. And if you’re pulling language from the internet or editing a template to fit your business, there’s a good chance you’re missing something. Industry-specific laws, consumer protections, and public policy all play a role in whether your contract will stand up in court.
Getting legal help brings peace of mind to your business and ensures your agreements actually protect you. A qualified attorney can help tailor contracts to your industry, identify hidden risks, and make sure you’re not overlooking language that could cost you down the line.
Need help protecting your business from contract risks? Contact Dahl Law Group to collaborate and draft contracts that meet your expectations and deliver legally enforceable agreements.
Dahl Law Group
