Reading a contract thoroughly before signing is an essential best practice for your business. Although it may be easy to assume the written language reflects the verbal agreements from negotiating, that may not always be the case. Additionally, clauses may be incorrect or adverse to your business’s interests.
Below are some reasons you should carefully review a contract before signing it. Please note that the below list is not exhaustive. The team at Bone Robertson & McBride, Inc. can also provide resources on this topic. You may contact Don Bone for more information, firstname.lastname@example.org or 925-674-1000 Ext 103.
Reasons To Read a Contract Before Signing
Contracts are everywhere in the business world and govern many commercial activity aspects. Whether you are signing a lease agreement, purchase agreement, a framework agreement as a subcontractor or a licensing agreement, the language used in those documents can significantly impact your operations. Here are some reasons why it is necessary to read a contract before signing it.
- It helps you understand duties and obligations. There may be numerous discussions before a written contract is generated. Additionally, those conversations may occur over a long time, and the language in the contract may differ from your recollection. Reading the contract before you sign it can help ensure you understand each party’s duties and obligations. Specific deadlines and penalties for not adhering to them may be included. If you do not read the document, you may unknowingly breach the agreement, which can negatively impact your business.
- It’s beneficial to review boilerplate language and fine print. Many times contracts will use standard or boilerplate language. While it may be tempting to skim these sections, it is generally in your best interest to confirm that the clauses reflect your understanding of the agreement and do not harm your business. For example, incorrect phrasing or specific language may restrict your rights or protections. By carefully reviewing all sections in the document, you can reduce the likelihood of agreeing to something that does not benefit your operations.
- It can prevent misunderstandings. Contracts may contain a section that defines how words are used in the agreement. Paying attention to these meanings is crucial as it can help clear up ambiguities.
- Once you sign, you are generally bound to the contract. Signatories to a contract are typically deemed to have read it. By signing it, you agree to all of its terms—this makes it critical to understand what it says before you sign.
There are several other reasons to read a contract before signing it. It may also be beneficial to seek legal counsel while going through this process.
The team at Bone Robertson & McBride Inc. can provide more information on this topic and also help with your business’s insurance needs. Contact us today for more details.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact Don Bone today for further information, email@example.com or 925-674-1000 Ext 103.