Checking a contract before you sign: what to look at

A contract usually arrives with a friendly note: "standard terms, just sign and send it back". But standard for the other side is not always fair for you. A lease, a freelance agreement or a supply contract can hide a long notice period, an open-ended liability or a fee you did not expect. You do not need to be a lawyer to spot the main risks. Here is what to look at before you sign.

Know which side you are on

Read the contract as the tenant, the contractor, the buyer or the supplier, whichever you are. The same clause can protect one side and bind the other. Before you start, write down what matters most to you: getting paid on time, a fixed price, a clear deadline or an easy way out.

Payment and price

• The amount and the currency, including taxes, fees and expenses.
• When you pay or get paid: on signing, by stages, 30 or 60 days after an invoice.
• Price changes: can the other side raise the price during the contract, and with what notice?
• Late payment: is there a penalty, and does it work both ways?

Deadlines and what counts as done

Look for dates, not words like "promptly". Check what happens if a deadline is missed and who decides that the work or the goods are accepted. If acceptance has no time limit, payment can be delayed for a long time.

Liability and penalties

• Caps on liability. Is your responsibility limited to the contract price, or is it unlimited?
• Penalties. Are they fixed amounts or a percentage per day, and is there a maximum?
• Indemnities. Do you promise to cover the other side's losses, including claims from third parties?

One-sided penalties are a common warning sign: you pay for every day of delay, the other side pays for nothing.

The way out

• Term and renewal. Does the contract renew by itself, and how many days before the end must you say no?
• Termination. Can both sides end it, with what notice and at what cost?
• What happens after the end: final payments, return of property, confidentiality that lasts for years.

What is missing

Sometimes the risk is a clause that is not there: no limit on liability, no deadline for payment, no rule for disputes. If something was promised to you by phone or in a meeting, such as a start date or a discount, check that it is written in the text. If it is not, it may not count.

Questions before you sign

Write a short list of questions for the other side and ask them in writing. A reasonable partner will explain a clause or agree to change it. Keep in mind that a plain-language reading of the text is not legal advice: laws differ by country, so for a large deal, have a qualified lawyer in your country look at the final version.

In short

Your side, the money, the deadlines, the liability, the way out and what is missing: that is the order in which to read a contract. If you would rather have it checked for you, order a contract review: you send the contract and say which side you are on and what matters to you, and get a plain-language summary, a table of risky or unusual clauses, missing protections and questions to ask, which you can then check with your lawyer. Payment is released only after you approve the work.