Tips on How to Review Contracts

Many new legal experts might struggle with reviewing contracts. Below are two steps that will make the process easier for you.

You can review a contract on a high level and then do a deeper review of its basics.

Follow the steps below to do a high-level review to ensure the terms of the contract accurately reflect the deal that you are getting into.

2- Check the contract’s action section to make sure that the terms of the deal are documented accurately.

3- Read through the whole contract and make sure everything meets your expectations.

4- Examine if any terms are missing from the contract.

5- Highlight your changes on the document. You may use comments on the document and the other party can reply directly once you share it with them. You may even need to write up a new contract and send it for a response.

Use the following steps to dive deeper into the contract review.

General points:

1- Make sure the parties are identified accurately.

2- Check whether all the capitalized terms are defined.

3- Ensure that the signature blocks are accurate.

4- Are references to schedules and exhibits correct? Make sure they are attached.

5- Double-check all the mathematical formulas.

Termination and terms:

• Make sure the term and expiration terms are written clearly.

• Check whether you can terminate early. If so, under what circumstances?

• Examine if the other party can terminate early. If so, under what circumstances?

• Check what rights parties have once they terminate early.

Terms related to action

• Check whether your performance obligations are accurate.

• Ensure that the other party’s performance obligations are precise.

• Examine if payment terms are accurate along with payment methods and dates.

• Check if the expenses are reimbursable, if yes, under what circumstances?

Warranties and Representations

• Check whether warranties and representations are accurate.

• Check if you are requesting the other party for sufficient warranties and representation.

Other terms

• Check whether there is a well-drafted confidentiality provision.

• Determine whether there is a non-solicitation or non-compete clause.

• Examine who owns the IP under the contract.

• Check whether indemnification clauses are provided.

• Decide if insurance is needed.

Boilerplate Provisions

• Check whether boilerplate provisions are present.

• Are you okay with the governing law?

• Decide if you are okay with the attorneys’ fee provision.

• SOWs will be attached if the agreement is an MSA. Find out which one precedes the other if they have conflicting terms.