Pro Tips for Reviewing Contracts
We use contracts every day in our personal lives and business transactions. At home, you may need to review contracts for cable television service, cell phone providers, gym memberships, and daycare facilities. At work, you may deal with leases, employment contracts, vendor agreements, non-disclosure agreements, and partnership agreements. If you need to review a contract, these seven pro tips from our experienced Maryland business attorney can help you cut through some of the legalese to identify the key terms contained in the contract.
7 Pro Tips That Can Help You Review Contracts Efficiently and Effectively
1. Clearly Identify Parties to the Agreement
The parties to the agreement must be clearly defined within the contract, typically in the beginning section of the contract. Make sure that all parties who might have any potential liability for legal issues or problems are named as a party in the contract in case you need to pursue a breach of contract or other legal action against the party.
2. Skim the Entire Agreement for Blanks
Nothing should be left blank on a contract. Begin by skimming the entire contract and noting any clauses or terms that contain blank spaces or lines. As you read through the document, continue to look for additional missing information that will need to be addressed.
3. Getting Out, Terminating, and Renewing the Contract
You may need to withdraw or terminate the contract before the term expires. However, you may also want to renew a contract if the relationship has been successful. Therefore, carefully locate and review these sections to ensure the terms meet your needs and expectations.
4. Terms and Conditions Must Be Clear and Concise
When reviewing the terms and conditions sections of the contract, it can help to make a shorthand list of the terms and conditions to mull over after you complete your review. For instance, when reading the payment term, note:
Late payment penalty
Remedies for default
Because a contract contains many sections that explain terms and conditions, having a shorthand list to review and think about can make it easier to determine if the contract is in your best interest.
Make sure that all parties who might have any potential liability for legal issues or problems are named as a party in the contract in case you need to pursue a breach of contract or other legal action against the party.
5. Read the Fine Print Carefully
Never skip the fine print or “boilerplate” sections of the contract. The section might bury language that binds you to mediation or arbitration to resolve disputes. The boilerplate language may designate a state that will have jurisdictions over disputes or an indemnity agreement to hold the other party harmless for certain actions. The fine print and the boilerplate section are an extremely important section that requires careful review.
6. Look for What May be Missing in the Contract
For example, if you are disclosing trade secrets or proprietary information to the other party, you need to ensure that the contract has a non-disclosure and confidentiality clause. Depending on your situation, you may want separate agreements to cover these issues, but the contract should refer to the agreements and make it very clear that the agreements bind all parties. As much as you are reviewing the contract for its contents, you must review the contract for what it may be missing too.
7. Review the List of Definitions Carefully
Unclear or insufficient definitions of terms may lead to costly disputes and delays. As with the boilerplate section of the contract, you need to carefully review each definition to ensure that each time the word is used within the contract that all parties have the same understanding as to the meaning of the term.
Do You Think You Need a Maryland Business Attorney to Help You With Your Business Contract Review?
Even though you utilize the above pro tips when reviewing contracts, having a Maryland business attorney review your business contracts can still provide great benefits for your company. Professional review of contracts helps identify errors and omissions that could lead to costly legal problems and litigation. An attorney can also summarize the dense legal language and terms into easily understandable sections and identify areas of concern to address before you enter into the contract. Contact Thienel Law today. Maryland business attorney Steve Thienel is dedicated to assisting clients in Maryland, Virginia, and throughout the DC Metro area.