Check, avoid the mess.
Before entering into a new contract it is important to go through a contract checklist to determine whether the contract should be executed. This is important because contracts govern commercial relationships and every aspect of the rights and obligations of the parties involved. Failing to cover your bases could lead to ambiguity, miscommunication and, in the worst cases, legal disputes.
Why you need a Contract Checklist
Without a detailed contract checklist, reviewing contracts can be a drawn-out and energy-intensive process. Contracting parties often enter into standardised agreements that can become outdated over the years if they are not properly reviews. Having a contract checklist in place for each type of contract you regularly enter into means that you are able to assess each contract against the checklist and ensure that the contract is compliant, protects your interests, clearly sets expectations in terms that the parties understand, which reduces miscommunication.
This short article will provide some of the key considerations you should consider and tick off the contract review checklist before signing.
Is the party who they say they are?
Before paying for services described in a contract or delivering them yourself, it is important to verify the other party’s credentials. Certain agreements like tenancy agreements require a verification of the party’s identity or their right to enter the contract. For example, it is a legal requirement for every residential landlord to check that a tenant or lodgerhas the right to rent from them. Moreover, your contract could be void ab initio and therefore unenforceable if the party you are contracting with is not who they say they are.
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Are the terms reasonable?
The terms of the contract are not always enforceable even if they have been accepted and signed by both parties. Clauses containing unreasonable terms can be void or worse, lead to a fine. For example, following the introduction of the Tenant Fees Act 2019, Landlords can no longer ask their tenants to professionally clean their properties on check out. We’ve detailed a full list of the terms landlords should exclude from their tenancy agreements in order to avoid the £5,000 penalty.
What happens if something goes wrong?
A contract is usually revisited post signature when something is not going to plan. For example, you might wish to terminate the agreement if the other side is not fulfilling their contractual obligations or is not quite up to the standards you were expecting. In this case, you should make sure the termination process is as straightforward as possible. Also, if the other side has caused harm to your business you might also wish to seek damages if applicable. complete
Clearly stating the conditions for terminating and seeking damages in your agreement will help avoid unnecessary delays or legal fees. For example, you should have an express term in the contract stating what will happen if the other party does not adhere to the payment terms or does not perform within the agreed time period set out in the contract.
What happens if something unexpected happens?
A contract can sometimes become impossible to perform due to circumstances neither party could have anticipated. Having a force majeure clause will enable the contract and the performance obligations of each party to be paused until it is safe to resume the responsibilities of the agreement.
If you don’t want to worry about your contracts being unreasonable, confusing or unclear, give Legislate a try. Our lawyer approved templates are written in plain English which means that everyone can understand them. You can set the terms of a Legislate agreement directly in the platform by answering simple questions and without the need to edit the template directly. Your Legislate contract will therefore always be valid, no matter how many changes you make to the terms.
You can read how to create your first Legislate agreements in our tutorial and watch a short demo. If you would like to try Legislate, sign up or book an introductory call.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.