Helpful Summary
- Overview: We give you an in-depth contract review checklist to follow to ensure accuracy, legality, and completeness.
- Why you can trust us: We have a proven track record of helping customers manage contracts more effectively.
- Why this matters: A thorough contract review checklist minimizes risk, ensures clarity, and saves time by preventing disputes and misunderstandings.
- Action points: Work through our checklist in order and make changes as needed. Also, find a reliable e-signature and contract management tool like SignWell to execute and track contracts seamlessly.
- Further research: Check out the SignWell blog for more tips on contract management and review.
Looking for a Checklist to Follow When Reviewing Contracts?
Contracts are the backbone of any business relationship.
In fact, 60-80% of business transactions are governed by contracts. Whether you’re hiring a new employee, entering into a partnership, or purchasing supplies, a well-reviewed contract can save you from future headaches.
But, without a legal team behind you, how do you ensure you’re evaluating all contract details effectively? A contract review checklist can help.
This SignWell guide will give you a comprehensive contract review checklist that you can follow to ensure you’re not missing any important info.
Why Listen to Us?
At SignWell, we’ve helped thousands of businesses streamline their contract management processes with simple, secure e-signing. Our platform saves time, speeds up deals, and protects you from disputes thanks to powerful security features.
The bottom line? We know contracts—and we’ve compiled our expertise into this contract review checklist to help you become a contract review pro.
Why Do You Need a Contract Review Checklist?
A contract review checklist is important for several reasons:
- It ensures clarity and completeness. By following a standardized checklist, you can confirm that all essential elements of the contract are included and accurately represented, reducing the chances of overlooking critical details.
- It aids in risk management. By identifying areas that might pose legal or financial risks, you can address them proactively.
- It promotes consistency in the review process. This is particularly useful for organizations that handle multiple contracts regularly.
- It saves time and resources. Streamlining the review process makes it easier to spot errors and discrepancies early on.
In-Depth Contract Review Checklist
1. General Information
- Contract Title: Does the title clearly reflect what this contract is about?
- Parties Involved: Double-check the full names, legal status, and addresses of everyone involved.
- Date: What’s the effective date? This is the date on which the contract becomes legally binding.
2. Definitions and Interpretation
- Key Terms: Are all the important terms listed and clearly defined? For example, “hereafter referred to as Contractor.”
- Consistency: Look for consistent use of these terms throughout the document.
3. Main Obligations
- Deliverables: What exactly is being provided? Each deliverable should be defined and itemized.
- Standards: Is there a defined standard or quality expected? If so, make sure you spell this out.
- Deadlines: Are the dates and timelines for delivery crystal clear?
4. Payment Terms
- Amount: Is the total amount to be paid correct?
- Payment Schedule: Check the deadlines and milestones for payments.
- Method: Is the payment method and currency specified?
- Late Payment: What happens if someone pays late? Any penalties or interest?
5. Term and Termination
- Duration: What’s the contract term? Are start and end dates nailed down?
- Renewal: Is there an automatic renewal clause? If so, how does it work?
- Termination Clauses: Under what conditions can the contract be terminated?
- Explanation: Be as clear as possible here to avoid disputes down the line (e.g., “if the services aren’t delivered by the [date] and no extension is agreed upon, either party may terminate this agreement with [notice period] written notice.”).
- Notice Period: How much notice is required for termination?
- Explanation: A notice period is the amount of time needed to inform the other party of termination. This section should specify how much notice is required and in what form (e.g. written, email).
6. Indemnities and Liability
- Indemnification: Who’s indemnifying whom, and for what?
- Explanation: Indemnification is a fancy way of saying “who is responsible for what.” This section should clearly state which party is responsible for damages, losses, or liabilities.
- Limitations of Liability: Are there any caps on liability or exclusions? Understand them clearly.
- Explanation: An example of a liability cap would be “the maximum amount of damages that can be claimed by either party is limited to the total contract value.” So, if a contract is worth $100,000, it would be capped at that amount.
7. Confidentiality
- Scope: What counts as confidential information?
- Duration: How long do the confidentiality obligations last?
- Exceptions: Any exceptions to keeping things confidential?
8. Dispute Resolution
- Governing Law: Which jurisdiction’s laws govern this contract?
- Explanation: This is usually the state or country where the contract is being signed and executed. International contracts get a bit more complicated, so make sure you specify.
- Resolution Mechanism: Mediation, arbitration, litigation—what does the process look like?
- Explanation: Give a basic outline of the resolution process that at least covers the order of the steps. Also, make sure you explain how long you’ll wait after written warnings and reminders.
9. Amendments and Waivers
- Procedure: What’s the process for amending the contract? Can it be amended?
10. Force Majeure
- Events: What events are considered force majeure?
- Explanation: These are events that impact one (or more) party’s ability to fulfill the contract… but are outside of their control. Think—natural disasters, war, government actions, and labor strikes.
- Consequences: How do these events affect contractual obligations?
11. Compliance
- Regulations: Is the contract in line with relevant laws and regulations?
- Explanation: Here, you want to make sure that your contract isn’t illegal (and therefore unenforceable). This doesn’t necessarily mean blatantly illegal, either—there may be minor regulations that you need to comply with.
- Permits: Are all necessary permits and licenses in place?
12. Signatures
- Method: How will the contract be signed? If you’ll be using an e-signing tool like SignWell, specify that here.
- Execution: Who has the authority to sign on behalf of each party?
- Witnesses/Notarization: Does the contract need witnesses or notarization?
Conclusion
Reviewing contracts might seem daunting. But with the help of a checklist, the process can be straightforward and efficient.
Looking for an e-singing tool that will help you get your reviewed contracts signed? SignWell gives businesses and individuals access to secure e-signing, document tracking, integrations, and more.
Try SignWell for free and take the first step toward hassle-free contract management.
Disclaimer: The author of this post is not a legal professional. You should always consult with a legal professional for specific guidance on contracts and regulations. This content is meant to provide general information and should not be used as a substitute for legal advice.
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