Do you know how to review a business contract correctly? For example, are you sure what should be included in an employment contract review? Would you be able to spot errors in the employment contract to avoid potential liability and legal issues? If you are not familiar with the contract review process, you may want to contact our firm to discuss ways that you can protect yourself and your company.
The Contract Review Process - Seven Contract Review Tips
A contract review attorney can help you learn how to review a business contract accurately. Before you review a business contract again, take the time to review these seven contract review tips.
Steps to take to review a business contract:
1) Make sure you have all the pages of the contract
This step may seem like common sense, but if the pages of the contract are not numbered, it could be easy to overlook a missing page. It is a good idea to insert page numbers on each page of a contract. Using a format that includes the total number of pages (i.e. "Page 1 of 10") is the best way to ensure you have all pages when you review a business contract.
2) Understand the language used in the contract
Legal wording can be confusing. If you do not understand certain words or phrases in the contract, talk to your attorney. Do not sign a contract if you do not understand parts of it.
3) Read the entire contract, including the fine print and attachments
Do not "skim over" any portion of the business contract. Read the contract "word for word," including all attachments, footnotes, and fine print. Skimming over a contract can result in an agreement that favors the other party more than you.
4) Identify all parties to the contract
Make sure that you check the contract to ensure that the parties to the agreement are clearly identified. Any party to the agreement should be named and identified within the first section of the contract.
Also, check to ensure that all parties named in the contract have correct signature blocks. For example, if your company is a party to the contract, but you are not personally liable, your company should be the named party and your signature line should read "Your company name, by your name and title."
5) Check for correct terms and termination policies
The contract should have clear terms and provisions for terminating the agreement. Contracts that do not have clearly defined expiration dates can result in disputes regarding the end of the contract.
6) Does the contract contain confidentiality agreements?
If you are disclosing company information, trade secrets, or intellectual property, the contract should contain a non-disclosure agreement. You may also need a non-compete or non-solicitation agreement to protect your customer or client base.
7) Terms, Representations, Warranties, and Dispute Resolution
When you review a business contract, the sections containing the specific terms negotiated between the parties, warranties, representations, and dispute resolution terms are the "core" of the contract. These sections represent your agreement and outline the duties and responsibilities of each party. It is crucial that you carefully review each section for accuracy.
When reviewing these sections, it helps to have your notes from the negotiation to reference. You may want to create a checklist from your notes with details of each term and condition that should be included in the contract. Use your checklist to ensure that no terms have inadvertently been left out.
Also, make sure that the wording is clear and transparent to avoid any confusion or misunderstanding. It is much more difficult for a party to claim that it did not agree to the terms of the contract if the terms are plain and simple. While a contract may require certain legal wording to make it binding under contract law, the wording does not need to be overly complicated.
Contact Calkins Law Firm for Help With Business Contracts
Business contracts are legally binding. It is crucial that you review a business contract in full before signing it. Once the contract has been signed, you are legally bound to the terms and conditions within it.
The contract review process used by your company does not need to be overly complicated, but it does need to be thorough and uniform. Our contract review attorney can provide guidance and advice regarding a variety of issues related to business contracts.
For more information or to schedule a consultation with one of our business attorneys, please contact our office.