Entering into contracts is an integral part of running a business. Getting things in writing can help establish a strong and honest relationship between the parties, as well as protect both parties from risks. A well-written contract can mark the start of a fruitful partnership. A poorly-written contract, on the other hand, can do more harm than good. Sometimes, disputes are unavoidable, and a weak contract will only contribute to existing issues.
One thing that can help businesses prevent such situations is contract review. Contract review software like Loio can help you avoid silly mistakes and typos in your legal documentation. Hiring an attorney or a firm to help you with contract drafting and management is common practice in many fields. There is no better way to protect yourself, and here is why.
Contract review goes into effect before you even sign the contract. First, you need to understand what the purpose of the contract is and whether or not you agree with everything that’s written. Individuals and businesses get scammed far too often. Downplaying the importance of contract review at this stage can be detrimental to your success. A skilled lawyer can help you see all the pitfalls of the contract and suggest edits that will make the final product more favorable for your business. Similarly, you can identify potential risks and pitfalls in the contract review process. Risk assessment is essential because it can save you a lot of time and money in the future. While you wouldn’t sign something obviously unfavorable or illegal, you can easily sign a contract that’s risky without even knowing it. If you don’t review your contracts, you can be sitting on a mine that will blow up any second.
The first draft of a contract rarely gets signed. Usually, there will be several edits from both parties before the contract is in perfect shape and ready for signing. Luckily, you have the option to suggest your own edits if you find the terms unfavorable. However, suggesting edits is not as simple as writing what you want on a piece of paper and sliding it across the table to the other party. You need to adopt the right approach to convince the other party that your edits will not put them at a disadvantage. That’s what lawyers are for. They will find the right approach to the problem and communicate effectively with the other party.
Getting the contract signed does not signify the end of the contract review process. The process goes on until the contract is no longer in effect. An attorney can be very helpful at this stage too. For example, a good lawyer knows how to ensure contract compliance. It may sound like something that needs to be taken care of way before the contract is in effect. While that is true, contract compliance remains an issue all throughout the duration of the contract. Laws and regulations change with time, so something that was not an issue at the time of signing may become problematic months later.
When the contract is coming to an end, you can choose to renew it, renegotiate, or end it. If you choose to renew the contract, the process of contract review will come in handy once again. That’s when you get to evaluate how the contract has served you so far and what you would like to change. Perhaps you can identify certain elements of the contract that created uncomfortable and risky situations. Maybe you’ve developed a strong relationship with the other contracting party and can come to a more mutually beneficial agreement. Or maybe you will find that the contract did not live up to your expectations, and the smartest move would be to end it. Either way, contract review can be a great help!