Contract Review Checklist

Is there already a contract in place between the parties? If so, could this new business arrangement be dealt with as a variation to the existing contract rather than as a new contract?

Are there already any arrangements with third parties (such as an exclusivity or non-compete commitment) that might prevent the parties from going ahead with this contract?

Are there any conditions, licenses, or permits that need to be satisfied or obtained before a party can go ahead with the contract?

Confirm who will be the parties to the contract and that they are correctly described.

Check if the parties are contracting as companies, as sole traders, or as partnerships.

Make sure companies identify the entity's corporate name, its registered office address, and its company number. It's usually best to check these against publicly available.

Is the contract for a fixed term, or is it a recurring month-to-month type arrangement?

Does either or both of the parties have an option to extend the term? Check the mechanics for when any option notice must be served on the other party.

Check that the term is correctly defined and consistent with the other provisions of the contract.

What are the termination provisions? Can a party terminate any time they want (for convenience)? Are there other defined circumstances in which a party can terminate, such as for breach of the contract, insolvency, or a change of control?

Check that the goods or services that are being supplied under the contract are clearly defined.

For services, consider describing what is included and what is out of scope.

If services are being provided, will service levels apply? If so, consider what will be measured, by whom, and when. 

For goods, will a simple product description be sufficient, or is a more detailed product specification required?

Is there a mechanism to vary the contract during its term?

Which party can request or make changes?

When supplying goods, at what point will delivery occur? Will title and risk transfer at the same time as delivery, or is there a "retention of title" clause?

Does the customer have a right to inspect or test the goods? Does the contract define any "acceptance criteria" or limit the customer's ability to reject or return defective goods?

For services, are there any milestones or deliverables that have to be completed? These aspects are essential for a contract review because they ensure both parties take responsibility for providing and getting high-quality goods. 

Are the prices or fees clearly set out (is it made clear how prices will be calculated)?

Does the price already include the amount of any sales tax? Are there other costs to be added (such as insurance, freight, or other expenses incurred by the supplier)?

How does the contract deal with price reviews and changes during the term? Is the supplier allowed to raise prices to reflect inflation? Or is there a "meet-the-market" type benchmarking clause?

Are the payment terms clearly set out? Issues to consider include how much time the customer has to pay after being invoiced and whether interest applies to late payment.

Check any provisions that attempt to exclude or cap liability. Are these reasonable (especially when compared to the type of goods or services being supplied and the price being paid)?

Are there any indemnity provisions that could affect a party's liability?

Are the parties excused from performing their contractual obligations if they are impacted by events or circumstances beyond their control (that is, a force majeure event)?

Does the contract allow a party to terminate the agreement if the terms are not followed because of the events beyond the parties’ control?

Does the contract specify a dispute resolution process instead of litigation (such as internal escalation, mediation, or arbitration)?

If so, is the process suitable for the type of contract?

Will the contract involve the transfer of confidential or personal information?

If so, does the contract specify adequate data security measures?

Are the obligations sufficient to comply with privacy laws in the contract jurisdiction?

Are there obligations on the other party to investigate, report, and assist with the notification process in the event of a data breach?

Are there any other requirements to consider that are intended to ensure the other party performs its obligations? Examples might include personal or bank guarantees, performance bonds, security deposits, or escrow arrangements outlined in the contract review.

Does the contract contain adequate confidentiality obligations?

Check that the contract contains all the other usual types of "boilerplate clauses," such as governing law, how notices are served, assignment, and any limits on subcontracting.

Check that all legal writing is clear and precise and that there aren't any formatting or other types of errors (ideally, using contract review software to identify errors that might otherwise be missed).

Check all defined terms are used correctly.

Check cross-references have been properly updated and are pointing to the right clause.

Check names, places, dates, and amounts are all correctly set out (whether in words or in figures).

Who will sign the contract, and in what capacity?

Do the signatories have the authority to sign this contract?

Are there any local legal requirements to ensure they are complied with so that the contract will be valid and binding?