As a business owner, it is vital to review every contract that you enter into thoroughly so that you are fully aware of each parties’ obligations as well as the consequences if the terms and conditions of the agreement are not met. If you are not comfortable with the contract terms, a contract review will help identify and modify the contract before it is signed. When reviewing a contract, there are some items that you should look for:
- Key Clauses & Terms – Terms such as confidentiality, indemnification, termination, dispute resolution, disclaimers, payment terms, and warranties are some of the standards that deserve special attention.
- Termination & Renewal Terms – You want to be sure you understand these clauses to know how the contract can be terminated or so you don’t miss an opportunity to renegotiate or cancel the contract.
- Clear Language – You want to be sure all of the languages in the contract are clear and straightforward. Unclear or ambiguous language may be subject to interpretation and could be the deciding factor of a contract dispute.
- Blank Spaces – Because many contracts are boilerplate templates, you should remove or complete any blank spaces. The contract should be complete and without any gaps prior to final signatures.
- Default Terms – Default terms outline the consequences of breaching or failing to comply with the obligations in the contract.
- Dates & Deadlines – Dates and deadlines lay out the timeline for the contract. Additionally, they are a useful planning tool for your business.
Contracts are an important part of a business plan. They help to protect you and your business. Having a full understanding of the agreement you are entering into is essential. Contracts are legally binding documents. As such, they can often contain complex terminology and clauses. It is advisable to consult with your business attorney to review your contract with you. An experienced attorney will be able to help you negotiate the best possible terms for your business.
If you believe you need to talk to an attorney regarding the setup of a business, business litigation, contract formation or litigation, or any other commercial or corporate law needs, contact our office at 330-922-4491 or through our contact page to schedule an initial consultation.