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Review this checklist before signing a business contract


The contract is one of the most important building blocks of a successful business. It is a part of almost all business relationships, so undoubtedly you will be signing many as you grow your company.

Because contracts are so standard, or maybe simply because you are inexperienced, you may not put as much effort as you should into reviewing them before signing. Not being thorough can land you in trouble should you or the other party breach the terms of the agreement due to lack of understanding.

Make sure you arm yourself with the knowledge of what to look for and expect before you sign your name.

Research the business to ensure trust

How much do you know about the other company you are going to work with? You should be able to sign with the trust that the party will not intentionally fail to deliver. Research the integrity of the business, such as how many previous lawsuits it has been a part of and how they turned out.

Negotiate the contract

The document you receive is not set in stone yet. You have the option to try negotiating more favorable or clearer terms. In fact, it is normal to do so. You can add or eliminate clauses to better suit the situation. You may also be able to completely draft a new contract from the ground up.

Check for errors

One of the biggest reasons for disputes is errors, which are avoidable with careful reviewing. Look for the following common mistakes:

  • Blank spaces or the omission of vital information, such as deadlines and fees
  • Vague or ambiguous language
  • Typos

In addition, make sure the contract covers areas such as dispute resolution, termination and unexpected factors. Double-check that all clauses not relevant to the business relationship do not remain in the agreement, even if the other party claims that it does not enforce those terms or they do not apply. If it is in writing, and you signed it, it is legally enforceable.

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