Conducting a contract review is an important aspect of the contracting process because it allows you and your company to completely grasp what you’re committing to before putting pen to paper. A contract review reduces organizational risks and raises the possibility that a deal will benefit all parties involved. You run the danger of committing to obligations you can’t keep, hurting your company’s brand and reputation, and losing time and money addressing conflicts that could have been avoided if you conduct a thorough contract review.
When reviewing a contract, there are a few things to keep in mind
It’s a good idea to start with a strategy when conducting a contract review so that you can ensure that the contract’s most important components have been thoroughly analyzed. If any errors or inconsistencies are discovered during the contract review, or if any questions arise, you should not proceed with the contract until you are certain that all issues have been resolved. While reviewing a contract, here are some of the most crucial things to look for.
Important Clauses and Terms
Every line of a contract is vital and should be read thoroughly, but certain terms and conditions are clearly more important than others. The most important contract terms will likely vary depending on the firm and industry, but there is a handful to keep an eye on regardless. Confidentiality, indemnity, termination, and dispute resolution are all important components of a contract that should be carefully scrutinized to ensure that the language is acceptable.
Terms of Termination and Renewal
Before signing any legally binding agreement, make sure you understand the contract’s termination and renewal provisions to prevent being stuck into a contract for a longer period of time than you intended.
The language that is clear and unambiguous
As you go through a contract, pay close attention to how each sentence is phrased, and look for wording that might be taken in a variety of ways. Even if all parties agree on the meaning of ambiguous terms, it’s still a good idea to adjust the language if it’s possible to avoid problems once the contract is signed and active. If there are significant conflicts, a property contract review agency or a third party may be required to determine the next steps based on how the contract is understood, so make sure all requirements are expressed properly.
There are no empty spaces
All blank places should be filled in or erased before signing the final contract. Failure to fill in a blank place in your agreement could have serious consequences for your business, depending on the circumstances.
Keep an eye out for default terms so you know what happens if you don’t fulfill your obligations – or what options you have if you’re not the one who broke the contract.
Deadlines and Important Dates
Planning ahead of time will assist to reduce the chances of a contract breach, which might have serious consequences for your business.