A commercial contract review checklist is an essential tool for businesses when entering into agreements. These contracts include Employment agreements, Master service agreements, Sale/purchase agreements, Lease agreements, Shareholder's agreements, Joint Venture agreements, Franchise agreements etc, which help ensure that contracts are comprehensive, accurate, and compliant with relevant laws and regulations. Without a checklist, businesses may face missed deadlines, inadequate protection, and legal non-compliance, which can lead to potential financial loss and liability.

In this blog, we will provide a comprehensive contract review checklist for commercial contracts that businesses can use to ensure all relevant considerations are taken into account before entering into an agreement. While each contract is unique, this checklist can be adapted to meet the specific needs of each contract.

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The Checklist:

1. Identifying the parties: Verify that the correct parties are identified in the contract, and that their names, addresses, and other relevant information are accurate.
2. Purpose of the agreement: Ensure that the purpose of the agreement is clearly defined and that it aligns with the business's goals and objectives.
3. Term of the agreement: Review the start and end dates of the agreement, as well as any renewal or termination provisions.
4. Consideration: Ensure that the consideration being exchanged is clearly defined and that it is reasonable and fair.
5. Representations and Warranties: Review the representations and warranties made by each party, and ensure that they are accurate and sufficient.
6. Covenants: Evaluate the covenants and obligations of each party, and ensure that they are reasonable and feasible.
7. Indemnification: Assess the indemnification provisions and ensure that they provide adequate protection for the business.
8. Limitation of liability: Review the limitations of liability provisions and ensure that they are reasonable and appropriate.
9. Confidentiality: Examin the confidentiality provisions and ensure that they are adequate and comply with relevant laws and regulations.
10. Dispute resolution: Review the dispute resolution provisions, including any arbitration or mediation provisions, and ensure that they are fair and effective.
11. Governing law:  Analyse the governing law provisions and ensure that they are appropriate and comply with relevant laws and regulations.
12. Assignment: Review the assignment provisions and ensure that they are appropriate and consistent with the business's goals and objectives.
13. Entire agreement: Check the entire agreement clause and ensure that it accurately reflects the parties' understanding of the agreement.
14. Counterparts: Review the counterparts provisions and ensure that they are appropriate and consistent with the business's goals and objectives.
15. Amendments: Review the amendment provisions and ensure that they are reasonable and appropriate.

While reviewing the contract, make sure to note important timelines and examine key terms and clauses. Ensure that important clauses like pricing, scope, indemnification, limitation of liability, confidentiality, term, and termination are defined accurately and clearly. Compare the key terms in the agreement to your expectations and ensure that they are consistent and in line with both parties' understanding.

If any key terms are missing from the agreement, identify them and discuss them with the other party to determine if they need to be included. Finally, check for termination and contract renewal rules and ensure that they are realistic and achievable.

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Reviewing the following six important components is necessary before sending the contract for any additions or omissions:

Grammar: Check the agreement carefully for spelling, punctuation, and grammatical issues to make sure the language is clear, succinct, and error-free.‍

Formatting:Check for professional formatting, consistency, and clear, pertinent headers and subheadings throughout the agreement. Make sure the contract is simple to read and understand.‍

Consistency: Verify that the agreement's typeface, spacing, and margin are all the same. Make sure all schedules and displays are legible, accessible, and properly labelled.‍

Cross-referencing: Verify that the agreement's cross-references are valid and that it is simple to find the sections they refer to.‍

Numbering: Verify that the agreement is consistently numbered and that the numbers are used effectively to make it easier to find certain sections.‍

Charts and tables: Verify that any tables or charts in the agreement are properly formatted and easy to interpret.

In conclusion, a commercial contract review checklist is a vital tool that businesses must use before entering into an agreement. It helps to ensure that contracts are comprehensive, accurate, and compliant with relevant laws and regulations. By following this comprehensive checklist, businesses can protect themselves from potential financial loss and liability.‍

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