Reviewing a contract before you sign: what to look for

Scope and deliverables

Vague scope is the leading cause of commercial disagreement. What exactly is being provided, by when, to what standard, and what is expressly excluded? If the answer requires a conversation to explain, the clause needs rewriting.

Payment and change orders

Set out amounts, timing, what triggers payment, and what happens when the work changes. A written change-order process prevents the common situation where extra work has been performed and neither party agrees it was authorised.

Termination, liability and dispute resolution

Three clauses do most of the work when a relationship breaks down:

• Termination: who can end the agreement, on what notice, and what is owed at that point
• Limitation of liability and indemnity: who carries which risk, and up to what amount
• Dispute resolution: whether disputes go to arbitration or court, and under which jurisdiction's law

The economics of review

A review before signature is a defined, modest cost. A dispute about an ambiguous clause is an open-ended one. Where an agreement governs a significant relationship or sum, review is almost always the cheaper decision.