The Problem with Online Contracts in 2025

Online contracts have never been more accessible. In 2026, business owners can generate agreements in minutes using templates, contract generators, or AI-powered platforms. While this convenience is appealing, it has also created a growing legal problem: many online contracts are incomplete, outdated, or dangerously unenforceable.

For small businesses, relying on online contracts can expose you to serious financial and legal risk.

Why Online Contracts Are So Popular

Online contracts promise speed, affordability, and simplicity. With just a few clicks, business owners can download agreements for clients, employees, vendors, or partners, often at little or no cost.

But convenience does not equal protection.

Most online contracts are designed to be generic. They are not tailored to your state laws, industry, business model, or real-world risks. In 2026’s increasingly complex legal landscape, that gap matters more than ever.

One-Size-Fits-All Doesn’t Work

The biggest problem with online contracts is that they try to cover everyone and end up protecting no one well.

Common issues include:

Missing critical provisions, such as dispute resolution, indemnification, or termination clauses;

Overly broad or unenforceable language, especially in non-compete, confidentiality, or limitation-of-liability clauses;

Conflicts with state law, which can render entire sections invalid;

Internal inconsistencies, where clauses contradict each other; and

Outdated legal standards, especially in fast-changing areas like data privacy and remote work. 

When a dispute arises, courts don’t care where the contract came from, only whether it’s legally enforceable.

Online Contracts Often Fail When You Need Them Most

Many business owners only discover problems with their contracts after something goes wrong. By then, it’s often too late.

Examples include:

A contractor disputes payment terms that were vaguely written;

A client challenges a limitation-of-liability clause copied from a template;

An employee claims a confidentiality or non-solicitation clause is unenforceable; and 

A partner exploits loopholes in a poorly drafted agreement.

At that point, the “cheap” contract can become very expensive.

AI-Generated Contracts Come with Hidden Risks

In 2026, AI-generated contracts are becoming increasingly common, but they raise new concerns. AI tools often pull from mixed legal sources, outdated laws, or jurisdictions that don’t apply to your business. AI cannot assess your risk tolerance, anticipate disputes specific to your industry, or ensure compliance with local laws. Without attorney review, AI-generated contracts may give a false sense of security while quietly exposing your business to liability.

Contracts Should Be Strategic Tools 

A strong contract does more than outline obligations. It:

Anticipates conflict before it happens;

Allocates risk intentionally;

Protects cash flow and intellectual property;

Sets clear exit strategies; and 

Strengthens your negotiating position.

Online contracts rarely accomplish these goals because they aren’t designed with your specific business in mind.

When Online Contracts Might Be Especially Risky

You should be particularly cautious using online contracts for:

Client service agreements;

Independent contractor relationships;

Partnership or operating agreements;

NDAs involving valuable intellectual property; and 

High-dollar or long-term arrangements.

These situations demand customization and legal strategy, not templates.

If your business relies on online or AI-generated contracts, you may be operating with more risk than you realize. A contract review now can prevent costly disputes later. Contact Brinkley Law today at 317-766-1379 to review, revise, or replace your online contracts with agreements tailored to your business, your state, and your long-term goals.