A contract is a written or spoken agreement between two or more parties. Anyone can enter a contract, including individuals, companies, organizations, and corporations.
One of the most common mistakes people make is failing to review the contract extensively. A contract signed without fully understanding agreements stated there may have negative consequences and legal complications.This is why assessing each part of the contract is essential tohelp youprotect your interests.
Contract review checklist
- Who are the parties involved?
Every contract has at least two parties. To know who you are entering a contract with, identify the parties involved and make sure that these are correct. You may even want to do a background check of the other parties. Doing so allows you to see how well they conformed to previous contract nuances. It may also help you for things as simple as their whole name, title, and position.
- What are both parties obliged to do?
An essential element of a contract is the obligation. The obligation, which includes the rights and responsibilities of each party, must be clearly stated. If you are not clear as to what you committed yourself to, you may be held liable for not fulfilling your end of the agreement.
- What are the terms of renewal?
Make sure you know the duration of the contract, when it ends, and if it is renewable. This way, you’ll know if the renewal is automatic or if there is a need forboth parties to discuss the renewal months before the contract ends.
- What are the payment terms?
Another essential part of a contract is the payment terms. These terms stipulate the amount each party will pay and when thisis due. The payment terms will also state if there is a minimum or limit on the amount a party has to pay, if the party can receive a refund given certain conditions, and if installment payments are allowed.
- Is there a confidentiality agreement?
If you want certain or all information in your contract to remain a secret, look out for the confidentiality clause. This term is also known as the non-disclosure clause and it protects sensitive information that isn’t for public consumption. Some contracts where a confidentiality agreement is necessary are those involving partnerships, joint ventures, business concepts, and business negotiations.
- Is there a termination clause?
A termination clause is also an important term in a contract. It allows you to leave or end the contract and discontinue your obligation if it no longer works to your benefit. Each contract comes with a different termination clause, with some even having unconditional termination rights or no termination rights at all.
- Are there any miscellaneous terms?
Typically found at the end of the contract, the miscellaneous terms are an essential portion that should not be overlooked. Also known as the boilerplate terms, these provisions state a variety of clauses such as separability, transferability, warranty, and force majeure.
Contract reviewing tip: It’s always a good idea to periodically review your existing contracts. This way, you can determine whether the said contract can still meet your needs or not.
When it comes to reviewing contracts, it’s always best to have reputable attorneys like Duran & Duran-Schulze by your side. Call (+632) 478 5826 or email firstname.lastname@example.org today.