Last Updated: June 19, 2020
Cheers! You have drafted a contract! Here is everything you need to finalize your agreement. A contract review checklist helps you navigate the essential parts of a contract and confirm that you have checked all of the boxes. A checklist also helps reduce the risk of miscommunication while eliminating common mistakes. Further, a contract review checklist provides a comprehensive overview of the anatomy of the contract.
How is a Contract Review Checklist Helpful?
A contract is an exchange relationship, one thing in exchange for another. Contracts are confusing; that is why it is crucial to implement sound contract practices, including a well-rounded review process. Addressing potential issues on the front end is key. A review process is vital because, without one, you are more likely to face unnecessary litigation. Litigation is expensive, slow, and exhausting.
A contract is a legally binding document memorializing the agreement of the parties. It specifically spells out the expectations of the parties. If one of the parties fails to satisfy their obligations under the contract, the other may have grounds for a breach of contract claim. Working without a contract review checklist could be harmful to the parties to the agreement. Some details must be included, as well as the required elements for the contract to be enforceable.
A legally valid contract must include an offer, an acceptance of that offer, and overall consideration. Here is a breakdown:
- Offer – Does the contract explain what the contracting party (offeror) is proposing to the receiving party (offeree)?
- Acceptance – Has the offeree formally accepted the offer?
- Consideration – Does the contract illustrate what each party will receive in return for fulfilling their obligations promised under the contract?
A contract review checklist should first ensure that all of the parties’ agreements, previous verbal agreements, and other writings are included in the final contract for review. If it is not in the contract, it may be hard to prove. Additionally, the contract should consist of simple language. The goal is that the contract is fair while being easy to understand.
While reviewing your contract, it is also crucial to confirm all of the tiny details are correct from the names, addresses, phone numbers, dates, and other key information related to the agreement. Moreover, confirm that each party to the contract has the authority to do so.
Depending on the type of contract, the terms may vary. Here is a general contract review checklist:
- The Title of the Contract
- Lease Agreement, Freelancer Contract, Subcontractor Agreement, Wedding Planner Contract, Marketing Consultant Agreement
- The Parties
- Names and/or entities
- Contact Information
- Background Information & Recitals
- The purpose of the contract and a brief description of the parties
- Scope of Services (the “deal”)
- Description of work to be performed and expectations and terms of the contract
- Description of compensation or details of the exchange
- Signatures are valid and properly dated
- Pages are properly numbered
- If desired, initials on the bottom of each page or next to a certain provision
The Scope of the Contract
- Business terms, and description of the services, product, or task(s) to be performed
- Important Dates / Deadline for deliverables
- Exhibits and Schedules (if applicable)
Cost & Payment Terms
- Fixed or Hourly Rate
- Time, Materials, and Expenses
- Hours, schedule, timesheet
- Will Expenses be reimbursed?
- Proof of expenses, receipts or fixed amount reimbursement
- Description of materials to be furnished (if applicable)
- Express whether the individual is an employee or contractor
- Frequency of invoice/payment period
- Payment due date and consequences of late payment
- Invoice dispute policy
- Method of Payment (cash, check, money order, paypal, cash app, etc.)
Termination and Duration of Contract
- Term of Contract (time frame)
- Effective date vs. signature date
- Definite duration versus undetermined duration
- Renewal Term (if applicable) or Automatic Renewal
- Notice Period of Termination and Causes
- Consequences of early termination
- Exclusivity / Non-Compete Clause
- Severability Clause
- Assignment / Subcontracting Permissions
- Amendments/Modification Procedures
- Governing Law
- Confidentiality and Property Rights
- Intellectual Property Rights and Ownership
- Dispute Resolution
- Good-faith negotiation before taking legal action
- Alternative Dispute Resolution (ADR)
- Legal Fees
- Indemnification and Release (“hold harmless”)
- Insurance Requirements (if applicable)
- Limited Liability
- Force Majeure / Act of God
- Warranties and Representations
- Entire Agreement
Optional Legal Review
- Prepare questions to ask an attorney
- Highlight areas that are unclear to you
- Consult with an Attorney to Review and Advise Contract
Why Should I Read and Review a Contract?
Always read what you are signing! That is why reviewing a contract is so important! When you sign a contract, you are representing that you have read, understood the entire agreement. Lastly, confirm the small details, payment amounts, dates, and other niceties for complete accuracy.
Now, let’s get that contract signed!
After you have had the opportunity to go through your contract review checklist, it is time to get it signed. ApproveMe provides a user-friendly WP E-signature tool to simplify the signature process. Prepare to be amazed by ApproveMe’s Signature tool. Our WP Plugin will change the way you do business!
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This Article is Part of ApproveMe’s Contract Guide for Beginners:
Sec 1: Contracts 101: Contracts Intro
Sec 2: Contract Definition & Importance
Sec 3: Are Agreements & Contracts Different?
Sec 4: The Elements of a Contract
Sec 5: Contract Terminology & Glossary
Sec 6: Free Contract Template Insights
Sec 7: How to Draft a Contract
Sec 8: Is Your Contract Enforceable?
Sec 9: Contract Review Checklist
Sec 10: Contract Negotiation Tips
Sec 11: Signing Contracts Online
Sec 12: How to Read a Contract
Sec 13: Contract Amendments
Sec 14: Contract Termination
Sec 15: Breach of Contract