St. Denis & Davey, P.A.

Legal Malpractice Issues

Can your lawyer be liable for leaving out an important provision in a contract?

by | Mar 20, 2022 | Contractual mistakes, Duty of Care, Legal Malpractice Law |

Were you harmed because your attorney did not include a key term in a business agreement or personal contract? Failure to include a crucial contractual provision may be the basis for a legal malpractice, attorney negligence or breach of fiduciary duty claim if it caused a client to suffer loss, usually financial.

Omitting a key provision can have devastating consequences and substantial financial harm. For example, leaving out an agreed-upon arbitration clause that would bind the parties to arbitrate contractual disputes may instead subject the client to expensive litigation. Or, leaving out a choice-of-law clause could subject the contract to interpretation under a state’s laws that are not advantageous.

On a personal level, legal counsel could leave out a clause in a real estate transfer document, a marital agreement, or a will or trust that would prevent the property transfer the client had directed. For example, the wrong person could receive an asset, or an ownership interest could have been incorrectly created.

Negligent omission of a major term may occur in several circumstances:

  • Your attorney left out a term you requested or that you had negotiated with the other party.
  • Your lawyer used a form contract that was not appropriate for your deal or that they should have revised to reflect your situation.
  • Legal counsel failed to include terms that were necessary to carry out your goals, but that as a nonlawyer you would not have known were necessary, so you executed the contract assuming the lawyer would have included all contractual provisions required to protect your interests. Often this kind of omitted term is one that an ordinary practicing lawyer would know to add to this kind of agreement to protect the client’s interests or carry out their wishes.
  • Careless review of a contract could miss devastating typographical mistakes such as leaving the wrongly typed price, even significantly higher or lower than negotiated. Or an error in the date a payment is due could create obvious problems for the client. Similarly, a mistake in the legal description of property in a deed or failure to grant or reserve an easement could prevent the transfer of the ownership interest the client meant to accomplish.
  • And others

The same kind of harm can arise when an attorney reviews a contract drafted by another law firm before the client agrees to sign it. A lawyer may be negligent if they do not advise the client to ask the other party to take out a harmful provision or request the addition of a key term of the agreement or that should be included to protect the client’s interest.

These kinds of cases can be quite complex, especially on the issue of whether the attorney’s breach of their duty of care caused actual harm to the client.