Yes, You Can Review A Contract in 15 Minutes - Here's How
Gemma Nugent
Plain English Contract Advice for Contractors, Engineers, Consultants and Small Businesses | Lawyer | Facilitator | Trainer | FAIM
Clients often tell me that they don’t read their contracts. I hear a few reasons for this:
Having seen a fair few contract stoushes, I think number 4 is missing a few words. It should say “No one cares about the terms and conditions until something goes wrong”. If someone had read the terms and conditions, a lot of mishaps could have been avoided. But that’s a blog post for another day.
The others are valid issues. I’m busy, you’re busy – we’re all busy. Setting aside the time to read a 100 (or more) page contract is next to impossible. Not to mention boring
I’m not a fan of overly long contracts. My personality style is to-the-point and my contracts match me.
But I’m a bit of a unicorn. Most lawyers get paid by the hour to churn out door-stoppers chock full of legal gibberish. I sincerely apologise on behalf of all those lawyers.
Speaking of gibberish – I get it, when you aren’t used to contracts, it feels like you won’t understand it. That has a lot to do with (un)familiarity. Review a few and you’ll get to know the lay of the land, and then you won’t be afraid anymore. Otherwise known as “fake it till you make it”!
The SoundLegal guide to reviewing a contract in 15 minutes
A quick and dirty review will never take the place of a comprehensive contract review. But, you can learn a surprising amount about a contract in 15 minutes.
To do it, you need to know the 3 key objectives of any commercial contract:
1. Managing expectations
This is where the contract tells you WHO is doing WHAT, by WHEN, how much it will COST and when will the cost be PAID. It’s partly the vibe of the thing, but more specifically, it’s the scope, the specification, the program, the pricing schedule and payment terms. Liability also falls in here; who is taking the risk and who is insuring it.
2. Managing change
The world is an imperfect place, and things change. The project owner might change their mind about the scope. The contractor might discover a bunch of hard rock where nobody thought it would be.
You need to check that your contract has processes to manage change, and that they are practical, fair and achievable.
3. Managing the relationship
Sometimes things don’t go as expected, and the project or relationship needs to come to an end early. Sometimes relationships sour, and you want to end it all before it gets ugly.
You need processes to manage this. If you’re the buyer, you may want to terminate for poor performance or insolvency. You might want an escape route (i.e., termination for convenience). If you’re the supplier, you may want to down tools if the client isn’t paying. Everyone wants to know what will happen on termination – what gets handed over and how much money changes hands.
It's also good to check the dispute resolution clause. I like to force everyone into a room to talk to each other face-to-face. The goal is to get over your differences and preserve as much of the relationship as possible. Not to mention preserving your funds, which will disappear before your very eyes if everyone lawyers up.
THE 4 STEP QUICK AND DIRTY REVIEW
Try this 4 step “quick and dirty” review:
1. Grab a pen and one or two pieces of paper (A3 size if you have flamboyant handwriting), and write three headings:
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2. Turn to the contents page
3. Jot down the relevant clauses and parts of the contract under each of these headings. If there ISN’T a clause that deals with the objective, flag this.
4. Open up the contract and have a quick look at each of the clauses you’ve jotted down. Think about these questions:
And there you have it. You’ll already have a good feel for the contract, and a better feel for how the project or relationship will go.
WHAT IF YOU STILL FEEL WORRIED?
So, you’ve done the quick and dirty review. Hopefully, you’re filled with confidence that the project can be delivered on time and on budget, and the parties will end up friends forever.
But what if you think the contract is missing some bits, or you can see all the clauses are really nasty?
Then, you call us. We’ll quote you a fixed fee to review the contract quickly and provide you with a bid-ready clarification schedule, flagging all the nasty risks.
Book a FREE 15 minute discovery call now
About Gemma
I help construction, engineering and consulting businesses create and negotiate clear contracts so they can make more profit and achieve great project outcomes.
I founded?SoundLegal?to help SMEs in the engineering, construction, consulting and light industrial sectors manage their risk to support business growth, by finding practical, common sense solutions to contractual and other legal challenges.
Subscribe to the SoundLegal newsletter “No Jargon”?to hear monthly business insights from me.
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1 年Great update Gemma Nugent - clear and to-the-point.