Master the Art of Contract Review with Expert Tips
What is the first thing you do when someone hands you a contract?
Anxious business owners who want to get the deal done may scan the agreement before signing it.
Likewise, the more cautious business owners might want to read the agreement before committing. But the thought of plugging through the agreement may be too daunting, so they shove it to the bottom of their work pile to read later.
Does this sound familiar to you?
You may have done one of these things as a business owner at some point.
Regarding contracts, it is always better to be safe than sorry.
- Reading through an agreement before signing is essential to understand what you agree to.
- By signing a contract without reading it, you have essentially agreed to all the terms and conditions listed in the contract without understanding.
- This can be a risky move, as you may not be aware of all of the potential consequences of signing the contract.
- If you encounter any problems or issues after signing the agreement, it cannot be easy to get out of it.
So, before you sign anything, please read through it carefully.
Have you ever wondered how lawyers can review the lengthiest contracts at lightning speed?
- Well, it’s no secret that we routinely use checklists when reviewing contracts.
- In our experience, checklists are essential when reviewing contracts for the first time, as it can be easy to overlook critical items.
- Using a list, we can ensure that every detail is noticed.
- You, too, can review your contract in 10 minutes.
5 Tips to Review Your Contract
- Note the specific requirements in the agreement.
- Compare the requirements in the agreement to the project specifications.
- Ensure that all the required information is included in the agreement, such as contact information, payment terms, and delivery dates.
- Review the terms and conditions, and ensure they are acceptable.
- Ask any questions and ensure your queries are answered.
What To Look for During a Contract Review
Contracts can be tricky, and crocodiles are always lurking in the dark. You need to know where to look for these crocodiles.
Here are some places where you can find crocodiles during a contract review.
1. Key Clauses & Terms
- Confidentiality clauses protect sensitive company information.
- Indemnification clauses protect the company from being held liable for any damages or legal costs.
- Termination clauses outline the conditions under which the contract can be ended.
- Dispute resolution clauses specify how any disputes will be resolved.
- Such clauses are all critical sections in an agreement.
- Therefore, they should be given extra attention to ensure the wordings are acceptable.
2. Termination & Renewal Terms
- Key clauses to look for include automatic renewal language and opt-out windows.
- Automatic renewals clauses usually mean that the agreement will generally renew automatically at the end of the current term.
- While the clause usually allows for cancellation within a set notice period, many business owners forget to cancel before the deadline. They are then stuck in an agreement they no longer want or need.
3. Clear, Unambiguous Language
- One issue that often arises when reviewing an agreement is ambiguous language.
- This is when the wording of a sentence needs to be clarified.
- This can lead to different interpretations by the parties involved.
- Vague or unclear terms can lead to conflict. It is, best to revise the wording to be more precise.
4. Default Terms
- Default clauses set out the terms which would apply where one party fails to meet their obligations.
- Knowing the potential consequences can help prevent unpleasant surprises down the road.
By using this simple 10-minute review system, you can ensure that your contract will enforce your business deal and protect your interests.
Need help reviewing your contract? We offer video consultation via Lawyer Anywhere so that you can get the help you need. Contact us today to get started.