What Is Contract Review?
Contract review is a process of reading and understanding a written agreement, often on a line-by-line basis. When a lawyer reviews a contract, they deeply analyze whether a contract is fair. They also look for loopholes to make sure you are protected once you sign the contract. A lawyer reviewing a contract may complete a few different key tasks, including:
- Examining the contract
- Explaining the contract to you
- Suggesting changes that would be in your best interest
Do You Need to Get a Contract Reviewed?
Contract review is an important component of any agreement made using a contract. This includes both business and personal contracts. All in all, if you're making a decision using a contract, you want to make sure you do not have a legal issue later on by having a lawyer review that contract before you sign it. Reasons to obtain a legal review of any contract include:
- Guaranteeing legality: You want to know your contract will stand up in court if necessary. A contract review will make sure all the terms used in the contract are indeed lawful and legal.
- Preventing misunderstandings: Having a lawyer review your contract will help ensure that all terms in the contract are clear. That in turn prevents parties to the agreement from misunderstanding what they sign.
- Minimizing legal problems: By ensuring all terms in a contract are both legally binding and understood by the parties signing the agreement, a contract review makes it less likely that future legal issues will arise.
What Is the Contract Review Process Like?
A contract review lawyer works with contracts, doing everything from creating and revising the document to helping you negotiate a contract's terms with the other parties. Contract review follows four general steps:
- Drafting the contract: A specific contract is created either by using a template or by having a lawyer write it.
- Reviewing the contract: A lawyer reviews the initial draft of the contract.
- Negotiating the contract: Once you have a contract draft you can work with, you can negotiate any changes you may want with the other parties (and vice versa).
- Signing the contract: After all parties to the agreement understand the terms of the contract and agree, everyone will sign the contract.
You can work with a lawyer to have a contract reviewed no matter which side of the process you are on. In other words, if you need to write a contract, a contract lawyer can be a big help. Likewise, if you are about to sign a big contract, you can first have that contract reviewed by a lawyer so you understand all terms and receive advice about any revisions you might need to request.
A contract review can highlight clauses or terms for you that are unclear or might cause problems in case of a dispute. The lawyer reviewing your contract can also show you clauses or terms that put you at a disadvantage or otherwise restrict your rights.
Once you understand your contract's legal consequences following an initial contract review, the contract lawyer can advise you on the best next step to take. Typical courses of action after a contract review include:
- Signing the contract as it is written
- Asking the other party to make minor modifications
- Asking for major changes to the contract
- Drafting an entirely new contract and then sending it to the other party
- Renegotiating the entire deal
What Types of Contracts Should Be Reviewed?
It's a good idea to have any type of contract reviewed before you sign it. Some common kinds of legal documents that require review include:
Employment contracts involving hiring someone to begin a new job or position. Key details of these contracts include:
- Intellectual property
- Job description
- Job security
- Non-compete clauses
- Non-solicitation clauses
- Start and end date
- Termination cause
Here is an article about employment contracts.
Freelancers may want to review larger contracts or contracts they plan to use frequently. Details reviewed will include:
- Ownership of work
- Payment amounts
- Scope of work
Real Estate Contracts
Many documents are involved with the selling, purchasing, or leasing of property. Examples include:
- Bills of sale
- Legal descriptions of property
- Mortgage loan documents
- Plot of land surveys
- Title insurance
Here is an article about real estate contracts.
Purchase agreements are contracts that transfer property such as vehicles, real estate, or other tangible assets from one party to another. Purchase agreements may involve many of the documents listed under real estate contracts as well.
Image via Unsplash via cytonn_photography
What Lawyers Look for During a Contract Review
A lawyer will look for many key details when reviewing a contract. This includes:
- Deadlines: If a task or tangible asset is due at a certain point, the contract should make this clear.
- Dispute resolution: A contract should clearly explain how parties can resolve disagreements that might arise over the course of the agreement.
- Blank spaces: A contract review will ensure you have not left any blanks unfilled in the contract. Though that may seem obvious, checking that all blanks have been filled in is very important. If you leave a space blank, someone could go back in and fill in something you would not otherwise agree to.
- Indemnification: Most contracts should have mutual language when it comes to indemnification. If a contract review reviews that only one party to the agreement is indemnifying, a lawyer will usually recommend you have that clause removed unless indemnification can be made mutual. Mutual language is important to include even in cases when one party could not be the cause of liability.
- Renewals: If a contract could be renewed automatically, the contract should specify whether or not you agree to automatic renewals.
- Representation: A contract should not give or accept any information that you do not know to be true.
- Responsibilities and rights: A contract should clearly explain what each party is entitled to as well as the obligations each party must fulfill.
- Risk allocation: A contract should detail how risk is allocated. Otherwise, you could run into a financial problem or another type of problem without clear guidance about who is at fault and how to fix the issue.
- Parties involved: A contract should use complete names to avoid confusion and list everyone involved in the agreement.
- Termination: A contract should specify possible causes for termination, detailing when, how, and under what specific terms a contract may end. A contract review will make sure the document contains appropriate language that defines the terms and process for breaking that contract.
- Terms: A contract is only a starting point, opening the possibility for further negotiation. You can negotiate terms you are not satisfied with. A lawyer reviewing the contract can point out terms that are not in your best interest. A lawyer will also check that all business terms used in the contract are accurate and legal.
- Warranties: Likewise, warranty terms should be clear in the final contract.
Whether you need to draft a contract or have received a contract to sign, you want to make sure you completely understand the terms and that the contract protects you legally. This is true of both business and personal contracts. Working with an experienced contract lawyer to review your contract will help you create a contract that does its job.
Meet some of our Contract Review Lawyers
I am a business law attorney with over 10 years’ experience and a strong background in information technology. I am a graduate of the University of California Berkeley, a member of the Illinois bar and a licensed lawyer (Solicitor) of England and Wales. I actively partner directly with my clients or indirectly, as Of Counsel, to boutique law firms to streamline business practices and manage legal risks by focusing on essentials such as - business contracts, corporate structure, employment/independent contractor agreements, website terms and policies, IP, technology, and commercial related agreements as well as business risk and compliance guidance.
Engaging Transactions Attorney with extensive experience in commercial real estate / project finance that possesses a winning blend of subject matter expertise, skill in client relationship management, and practical experience. Leverages a unique mix of legal, strategic, and analytical expertise, consistently meeting and surpassing client expectations. Specialties: Commercial Real Estate Law, Contract Negotiation, Procurement, Lease/Buy/Sell Transactions, Business Consultations, Team Leadership, and Economic Development
Miami-based duly licensed attorney and customs broker with significant experience in various types of supply chain business agreements, as well as experience in entertainment law.
I am a New Jersey licensed attorney and I have been in practice for over seventeen years. My practice mainly consists of representing public entities (municipalities, school boards, etc) and businesses, both small and large. In that capacity, much of work consists of drafting, reviewing and revising contracts.
Jennifer is an experienced business law attorney who has worked with many startups as well as established corporations. With a strong background in contract creation and review, she will be able to ensure you and your business interests are always protected.
I am a corporate lawyer with expertise working with small businesses, venture capital and healthcare. Previously, I worked at large law firms, as well as head attorney for companies. I graduated from Harvard College and University of Pennsylvania Law School. I speak 5 languages (Spanish, French, Italian and Russian, plus English), visited over 60 countries, and used to compete in salsa dancing!
I am a licensed attorney and a member of the California Bar. I graduated from the University of Dayton School of Law's Program in Law and Technology. I love IP, tech transfers, licensing, and how the internet and developing technology is changing the legal landscape. I've interned at both corporations and boutique firms, and I've taken extensive specialized classes in intellectual property and technology law.
Jo Ann J.
Jo Ann has been practicing for over 20 years, working primarily with high growth companies from inception through exit and all points in between. She is skilled in Mergers & Acquisitions, Contractual Agreements (including founders agreements, voting agreements, licensing agreements, terms of service, privacy policies, stockholder agreements, operating agreements, equity incentive plans, employment agreements, vendor agreements and other commercial agreements), Corporate Governance and Due Diligence.
I am an unabashed contract law geek with a passion for delivering contracts that protect your business within your risk tolerance. Contracts should be clear, concise, and able to be understood by the end user. I promote Plain English contract drafting. I also pay close attention to the boilerplate traps that trip up many agreements. Some of my most frequent drafting projects are entity operating and shareholder agreements, bylaws, asset purchase agreements, commercial leases, EULA, Terms of Service, Privacy Policies, Confidentiality agreements, employment agreements, and more.
I hold a B.S. in Accounting and a B.A. in Philosophy from Virginia Tech (2009). I received my J.D. from the University of Virginia School of Law in 2012. I am an associate member of the Virginia Bar and an active member of the DC bar. Currently, I am working as a self-employed legal consultant and attorney. Primarily my clients are start-up companies for which I perform various types of legal work, including negotiating and drafting settlement, preparing operating agreements and partnership agreements, assisting in moving companies to incorporate in new states and setting up companies to become registered in a state, assisting with employment matters, drafting non-disclosure agreements, assisting with private placement offerings, and researching issues on intellectual property, local regulations, privacy laws, corporate governance, and many other facets of the law, as the need arises. I have previously practiced as an attorney at a small DC securities law firm and worked at Deloitte Financial Advisory Services LLC. My work experience is dynamic and includes many short-term and long term experience that span across areas such as maintaining my own blog, freelance writing, and dog walking. My diverse background has provided me with a stong skill set that can be easily adapted for new areas of work and indicates my ability to quickly learn for a wide array of clients.
Texas licensed attorney specializing for 20 years in Business Law, Contract Drafting, and Risk Analysis. My services include: Corporate Risk Consulting; Contract Review and Drafting; Legal Research and Writing; Business Formation; Article or Instructive Writing; and more. For more insight into my skills and experience, please feel free to visit my LinkedIn profile or contact me with any questions.