Corporate & Commercial

What to Review Before Signing a Commercial Agreement

Scope, risk allocation, and exit provisions are where most contract disputes are born. A disciplined review finds them before they cost money.

August 21, 20265 min readBy Marcus Reed

A contract is a promise the law will enforce, the entire record of the parties' deal, no matter what was said over email or in a meeting. Before signing one that matters, it is worth reading it the way a court eventually will.

Scope and payment terms decide most disputes

The most common source of contract disputes is a gap between what the parties intended and what the document says. If scope, milestones, and payment terms are vague, each side will later interpret them in the way that suits them.

Ask what the contract actually requires: what is being delivered, by when, for how much, and what happens when the work changes mid-stream. Every significant assumption deserves to be written down.

Read the clauses that allocate risk

Limitations of liability, indemnification, warranties, and insurance requirements are dense and often unread, and they are where the largest financial exposure hides. A limitation of liability cap can quietly become the most important economic term in the agreement.

Understand what happens to warranties, who bears responsibility for third-party claims, and whether the parties' insurance actually covers the obligations being assumed. These clauses are negotiable, but only before signing.

Know how the agreement ends

Every contract eventually ends, and some end badly. Termination provisions determine how, how much notice, what happens to work in progress, which obligations survive, and where disputes are resolved.

A forum-selection clause that sends disputes to an inconvenient jurisdiction changes the economics of enforcement. Review how and where disputes are resolved before signing, not after.

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