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Business Contract Best Practices: 8 Tips for Reviewing a Contract Responsibly

Business Contracts Best Practices

When you have a business to run, it’s tempting to rush through paperwork as quickly as possible to get on with the million-and-one things you need to get done today. 

Business contracts are one area where you don’t want to take this hurried approach. It is essential to read all such legal documents carefully, request professional legal feedback from experts like these on the contents, and make any necessary adjustments to the documents before you sign.

Though a winging-it mentality may save you the hassle of flipping through pages and pages of paperwork, an eruption of post-contract mishaps will leave you wishing you read the fine print. 

Acknowledge a lawyer can benefit you in a contract review

It is never a good idea to review any significant contract on your own. An attorney with training in contract review can help you make sure the terms are correct and fair and that everything is in place.

Read the entire contract carefully

Even “smart” contracts generated by AI can contain mistakes and omissions. You need to read every word in every section, including the fine print, to ascertain that every line in the contract is correct before you sign the agreement.

Fill in any blank spots

Before you sign a contract, make sure there are no blank spots in it. Such empty sections could be filled in later by another party, altering the terms to which you have agreed. If the contract contains a blank spot, fill it in, initial, and date it. 

Make sure each party is correctly identified

One of the most basic but overlooked aspects of reviewing a contract is making sure both parties are named correctly throughout the document. A mistake here can cause major legal headaches down the road, so look extra carefully at each instance of either party’s name.

Choose which state’s laws will apply

If the contract parties are located in different states, the contract will need to specify which state’s laws will apply. If the contract does not make this specification, it could lead to difficulties in determining future litigation or negotiation.

Check all payment details

Make sure that all specifics involving payment amounts, methods, and timelines are correct. This step is one of the most important aspects of any legal agreement, so take extra care in covering these payment details.

Check all dates and deadlines

Dates are both one of the most critical elements of any contract and one of the common sources of tedious mistakes. Carefully check that every date and deadline matches up to what both parties have agreed upon. Then check again.

Take ample time to review the contract thoroughly

Reviewing a contract can be a time-consuming process, but don’t try to rush through it. Seek legal counsel, carefully look through each section of the contract, and compare it to any verbal agreements you have reached with the other party. Most importantly, don’t be afraid to insist that any oversights or mistakes are corrected before you sign.

To wrap up

Contracts constitute the legal foundation for all business enterprises. A well-written contract can give you peace of mind, knowing that the terms you have agreed to benefit both parties and cover your liability. It is essential to review the agreement carefully to ensure the agreement you are about to sign represents your best interests. One day, you’ll be glad you did.

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