Steps to Take Before You Sign A Contract

by Steven S. App critic and consultant

Contract Review Is Important

Here at Smiley Law Firm, we constantly advise clients on the importance of written contracts. However, just because a contract is written does not mean that the contract has your best interests in mind. A contract review is the process of having an attorney read, analyze, and provide alternate language so that you can have a contract that is more fair.

I see a few main issues regularly when it comes to contracts for my construction and business clients. The hardest part is getting these individuals and companies to implement written contracts. Then, the second challenge is to have these companies actually negotiate contracts they are given by other parties.

Devil In The Details

With contracts, the devil is in the details. There some contracts that simply cannot be changed or negotiated. Think your cell phone contract or your mortgage with the bank. These contracts contain hundreds of clauses that will never surface unless you are in trouble or defaulted on the terms, meaning you have not paid. There is no need for a contract review on this type of major corporate contract.

Many other contracts can be changed or negotiated. If you are a business owner and a vendor presents you with a contract for services, then you better read that contract and then try to negotiate the terms so that the terms are more favorable for you and your company. This process is what we call a contract review.

Contractors get contracts all the time from the hiring party, general contractor, developer or other parties on a construction project. Have your attorney review these contract documents and fight back with terms that work better for you and your company. It really is that simple.

Get Started

Contracts Can Be Negotiated

As stated above, you can negotiate most contracts. Most vendors, subcontractors, or other companies you do business with allow for contract negotiation.

There are reasons why this is the case.

First, the drafter (attorney) of the contract writes it to give every advantage to his/her client. This is purposely done. It is up to you to read the contract and then offer changes for the terms. Any ambiguities in a contract that was not negotiated will be interpreted against the drafter.

Second, because of the one-sided nature of a contract drafted by an attorney for one party, there is an incentive to have the other party make changes and alter the contract. If this is done then, in theory, the contract will not be interpreted against the drafter if any ambiguities arise because both parties took part in writing the contract.

In other words, the attorney who drafted the contract wants you to send back revisions. Then his burden is lowered if there is a default later or the contract ends up in litigation.

Fight Back With Your Contract Terms

Use the contract review process to your advantage. I can promise that the most successful companies negotiate nearly all of the contracts they enter.

I always borrow the medical analogy, an ounce of prevention is worth a pound of cure.

If you spend few hundred dollars removing or changing bad terms of a contract before you sign it, then you will save thousands or hundreds of thousands later on in litigation costs for trying to fight a one-sided contract in court.

Please leave comments below if you have questions regarding a contract you need to sign. We read and write contracts all day long. It is not exciting but someone has to do it and the attorneys at Smiley Law Firm do it well.

Original Article appears on the smileyfirm blog.