Are you someone who is all set to sign a contract? If you answered yes, and if that contract is extremely important for your business, you should definitely review the following article before signing on the dotted lines. You should take note of the fact that all business contracts both expect and allow for the transacting parties to negotiate changes to the contract before they sign on it. Though a contract can be overwhelming and complicated, it is a blunder to sign it before you have reviewed it properly.
Contract reviewing is a vital part of contract management, and we asked a contract lawyer to share his knowledge on how important it is to review contracts. There are few things that you have to review beforehand and unless you’re educated on these, you won’t be able to close a successful deal. Here is a checklist to help you with this.
Reviewing contracts – What is it?
If you are not sure about what a contract review is, you should know that this is the process of perusing the contract and understanding it line-by-line. In short, it is a deep analysis of the entire procedure to ensure that the contract has terms that are favorable to both parties and will create the scope of the working relationship. One more important thing to check is whether the contract has any loopholes which could harm you in the long run. Ideally, reviewing a contract is a long process as a lot of legal terminology is involved. This is why there are contract review lawyers who can do this on your behalf.
A contract lawyer is the best person who can examine the contract on your behalf, explain the meaning and significance of any terms to you and also suggest worthwhile changes while keeping your best interests in mind.
Mistakes to avoid while reviewing contracts
There is a bitter truth in this industry and that is most business owners make different types of mistakes while signing a contract. A few of the most common mistakes include:
- Thinking that hiring a lawyer for reviewing contracts is a waste of money
- Thinking a contract is non-negotiable and it is mandatory to sign on it
- Signing the contract before going through it
- Signing a contract before understanding it between-lines
If you commit any of these mistakes, you will end up signing on a contract which is definitely not in your best interest.
Getting a contract reviewed – What are the reasons?
It is important to have your contract reviewed as all business decisions are conducted in accordance with the contract. Contracts should be handled in a proper manner to prevent the building up of any legal issues later on. This means that every contract that is drafted and arbitrated will have to be reviewed by a lawyer before you even think of signing it. Here are the few ultimate reasons of reviewing contracts legally:
- There will be no chances of people misunderstanding what they’re signing. Each term and condition will be clear
- This makes sure that all the terms of the contract are legal and compliant with your industry
- This prohibits any future legal issues
To conclude, a contract review is certainly a vital part of any new relationship that is going to be established between two parties. While you may think that you don’t have enough resources to get the contract reviewed legally, you should still find out spaces in your budget to adjust for this. Don’t ever commit the mistake of not reviewing the contract before signing it.