Contract review is not an easy process, but the more careful you are now, the more time you’ll save later.
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As anyone who’s ever worked with a contract before will tell you, writing up a contract is just the first step of a long process. Of all of the stages of that process, the stage you’re entering right now–contract review–is arguably the most important.
Now that you’ve written the agreement, it’s time to make sure it works for all parties involved. That means going through the document with a fine-toothed comb to look for any and all possible points of contention.
Contract review is not an easy process, but the more careful you are now, the more time you’ll save later–and the happier everyone is likely to be during negotiations. Try following this example of a contract review checklist, step-by-step.
This blog post is offered for general information purposes only. It does not constitute, and is not a substitute for, legal advice.
When you first receive the contract you need to review, start by scheduling dedicated time for a formal review process. Mark the time off on your calendar and invite everyone relevant to the agreement you’re reviewing.
Your first order of business is to determine who should review the contract. Reviewers might include:
Have each reviewer follow all the steps below. As they discover elements of the contract that need to be revised or discussed, have them flag these points in their copy of the contract and notify all other reviewers.
Before you begin an in-depth review of the contract, take the time to read it over in its entirety at least once. Take notes about anything you notice right away during this read-through and highlight any passages that you find confusing or objectionable.
At this point, it may be helpful to outline the six essential elements of the contract for future steps and reference.
Read through each section of the contract clause by clause. If you have any reservations or questions, flag them immediately for the rest of your team to review.
The specific information you will have to check for will depend on your contract, but after this step, you should have definitive answers to at least the following questions:
For more context on what you should look for, see some of the most common hurdles to managing agreement language.
On this read-through, make sure that all the names, numbers, and stipulations are factually correct, including but not limited to:
Most contracts will include at least one clause about the duration of the agreement. Make sure those clauses are clear and accurate. Pay special attention to any mitigating circumstances that might cause the contract to be voidable or suspendable, as these could vary greatly based on the terms of your agreement.
Contracts should include a section on the enforceable consequences that will occur should either party fail to hold up their end of the deal. Review these consequences to ensure you understand exactly what is required of you, how you might fail to deliver on these duties as outlined by the document, and what will happen if you do.
Organize your notes into a prioritized list of bullet points. Include any sections of the contract you’ve flagged for further review, along with any questions you have about sections, clauses, or wording you’re unsure about.
Once you and the rest of your contract review team have compiled your notes, schedule a follow-up meeting. During this meeting, review your team’s notes point by point and devise a plan to address anything that you all agree needs to be revised.
