Why is a Contract Review So Important?

When running a business, contracts are not just more documents. They are the foundation of your obligations and the agreements you have made with other parties. Too many business owners simply sign a contract without fully reviewing it, or they skim the terms in an effort to save time. Instead of this being a time-saving tactic, though, it poses a real risk.

Legal disagreements do not typically appear out of nowhere. They often start with vague terms or overlooked protections that could have been caught through a thorough contract review, and prevented the dispute altogether. Below, one of our Utah business law attorneys explains the importance of a contract review.

Improperly Written Contracts Pose Legal Risks

Without a proper contract review, you may not realize that there are gaps in your contract until a lawsuit has already been filed. Perhaps the scope of work is not clearly defined, the terms of payment are too vague, or the contract does not outline what will happen if either side wants to terminate the agreement. While these issues may take time to appear, once they do you will have to rely on language that does not support your argument. When this happens, even a minor business deal can spiral into litigation and conflict.

Preventing Future Disputes Through Contract Review and Negotiation

A contract review involves more than just identifying errors and vague language. As you are reviewing a contract, you can also determine if you need to negotiate new terms. These may include fees for services, payment structures, the responsibilities of each party, and dispute resolution methods to utilize in the event of a dispute. Not only does this provide necessary clarity, but it can also set the tone for better working relationships as each party moves forward.

What to Look for During a Contract Review

Although all contracts are unique depending on the situation, there are a few elements that all agreements should include. These are as follows:

• Clearly defined roles and the goods or services to be delivered
• Specific payment amounts, dates, and fee structures
• An action plan to resolve disputes that is practical for all parties
• Termination clauses that offer all parties fair protections
• Fair liability terms that ensure you have a remedy, if needed, but also ensures you are not overly exposed

When reviewing a contract, it is important to note if any terms feel confusing, vague, or as though they heavily favor the other side. In these cases, it is a sign that the agreement needs closer review, and possibly some changes, before you sign it.

Our Business Law Attorneys in Utah Can Ensure Your Contracts are Valid

Before signing any business contract, it is essential to ensure it is valid, fair, and provide the protection you need. At AGS Law, our Utah business law attorneys can review your contracts to ensure they are enforceable and will help you protect your best interests moving forward. Call us now at 801-477-6144 or chat with us online to request a consultation with one of our experienced attorneys and to get the legal help you need.

Source:

le.utah.gov/xcode/Title15/C15_1800010118000101.pdf