When partnering with another business or individual, signing a contract is an inevitable part of the process to protect yourself from legal trouble in the future. Before signing, each party has their own contract review process to ensure they approve of the terms.
Contract review is a long and tedious process that keeps lawyers awake at night, reading through dozens of pages and checking every condition. There are many ways to tank your contract, and we’ll guide you so you can avoid all of them. Yes, that’s right. Keep reading to learn how to screw up your contract review process.
What’s a contract review process anyway?
The contract review process begins after the first draft of the contract is written. It consists of steps like examining terms and conditions, checking termination and renewal rules, and auditing contract language. Contract review procedures reveal whether the contract represents both parties’ interests and provide a clear understanding of terms and conditions. The review process also aims to ensure that the agreement follows the law and reduces the chance of legal challenges to its enforceability. Now, let’s find out how to make sure that the contract covers as many legal issues as possible.
Tips to screw up your contract review process
It’s easy to make mistakes while performing contract review procedures. Here’s how to do it with class!
Don’t review your contracts at all
Yep. Surely, you and your partners got it all correct from the start. You are professionals, after all. And professionals don’t need to check and double-check their work; that’s just a waste of time. Why spend resources on such a lengthy process when you could sign the first draft? And if you’ll need to make alterations later, just create a new contract from scratch and sign the first draft of the new contract. Save your time and the time of your partners.
Go with the first version of the draft
Once the first draft is written, make all further changes and adjustments in the same version of the document. Some businesses create a new version whenever a draft is changed so parties have a fresh perspective when they look at the final contract. We say that’s just a waste of time, and your time is valuable. You’ll never need to look back through the different versions. Just fix and sign the first version of the first draft.
Work with multiple versions of the document
If you or other stakeholders still decide to go with several drafts, make sure that all of them review different versions of the documents, access different documents via email, and leave some notes here and some there. Why use a single contract version when you can use dozens of them. And when the time comes, let some trainees handle all those documents and make a final version out of it? What else do they have to do anyway?
Spend as little time as possible on the review
If you’ve decided to be boring and review your contracts despite the previous tips, at least don’t spend too much time on it. Time is money, and you’ve got tons of other tasks to keep you busy. Instead of an in-depth reading of your contract, just skim through it.
Don’t bother about headings or numbering paragraphs
Who needs clear headings, subheadings, sections, and categories when you can write ten pages worth of text in one paragraph? A numbering system will only create more confusion and turmoil when reviewing contracts.
You’re a lawyer, not a scientist, and a proper numbering system for each section is just an unnecessary burden.
Don’t even think about negotiating
The contract should reflect your interests and only your interests. Who cares what the other party thinks or wants? Be sure to insist on every term and condition you propose, and don’t give in. For the other party’s demands, agree only to those that serve your interests.
Instead of negotiating, communicate your terms and conditions firmly from the start, and if another party has problems with it, think about whether you need such a partner.
Don’t worry about understanding contract
Contracts are full of legal language and complicated terms. If you or your stakeholders don’t understand the document, don’t worry about it. Contracts are instruments of the legal professional, and you’re a business person. Neither party is obliged to make it easy to understand.
Once the contract is signed, you’re legally obligated to follow its terms, so not understanding is like playing with the unknown — it could be interesting! You never know what will happen in the future.
Never, ever use automated contract lifecycle management (CLM) software
Why use modern technology when you can create all the contracts from scratch and fill each part in manually, as you see fit? We say, don’t trust automation technologies, like document drafting. Today they auto-fill data across all documents, but what about tomorrow? Will they take over our lives? Trusting automation and robots is never a good idea.
Now you’re all set to have the worst contract review process ever. Go with the first version of the contract draft, spend minimum time reviewing it, and don’t negotiate. In fact, don’t review the drafts at all; just send them for signing. And in no time, you’ll end with a contract that, instead of clarity, will only confuse you and your clients, and probably get you fired.
Jokes aside, we hope that now you know what you definitely should not do when reviewing contracts. If you want to learn more about how to have a smooth contract review process, don’t hesitate to contact our team. And feel free to explore AXDRAFT’s automated processes, especially the document drafting feature.
The contract review process is a set of actions that identifies and analyzes the terms and conditions of the document. It allows parties to evaluate each element, prevent any errors or discrepancies, and ensure the legal enforceability of the document.
Keep in mind that once you’ve signed a contract, you become legally obligated to follow its terms and conditions. Hence, make sure that you understand and agree to every part of the document, even the slightest details.
Look for any errors, mistakes, and discrepancies in the description of deliverables and responsibilities. At the same time, ensure that other parties are also satisfied with the conditions. Negotiate the terms of the contract, and don’t be afraid to review and change the draft multiple times until every element is satisfactory to everyone.
A contract review checklist lists key components to examine before signing a contract. It’s a bare minimum of what you expect to get from signing the contract and what you agree to do. The contract review checklist includes such points as:
- Terms and conditions each party must meet
- Renewal terms
- Allocated risks
- Links to other documents related to the contract
- Termination clauses, deadlines, and other significant dates