Sometimes you just need a quick sanity check on a contract before you decide whether to get professional help. This free checklist covers the essential things to look at in any commercial contract. Work through these points and you'll catch most of the common issues.
The basics
Who are the parties? Make sure you're clear on who the contract binds. If you're signing as an individual, that's different from signing on behalf of a company. If you're binding a company, make sure the person signing has authority. Is this contract between you and the supplier directly, or is there a parent company involved?
What is the effective date? Contracts usually say "this agreement is effective as of [date]." Check that the date makes sense. You don't want to be liable for things that happened before you signed.
What is the contract period? How long does this agreement last? Is there an auto-renewal clause (does it automatically renew unless you give notice)? What's the notice period for termination? Can either party exit early, or are you locked in?
What is the scope of the contract? What exactly are you agreeing to? Is it a service, a supply, a license, a lease? The scope should be clear.
The commercial terms
What are you paying? Price is obviously important. Is it a fixed price or variable? Are there price adjustment clauses? When is payment due? Thirty days? Immediately? On invoice or on completion?
What do you get for your money? What exactly is the supplier delivering or providing? Are there standards for quality, timeliness, or performance? If something goes wrong, what does the supplier have to do?
What are the payment terms? Are you paying upfront, on completion, or in instalments? If you're paying upfront for something you might not receive, that's a risk. If you're paying for each phase of delivery, that's safer. Is there a payment dispute resolution process?
Are there termination fees? Can you exit the contract early? If so, do you have to pay a termination fee? Is it proportionate to the remaining contract period?
Liability and risk
What is each party's liability cap? Look for limitation of liability clauses. Are there carve-outs for death, personal injury, fraud, or breach of confidentiality? Is the cap symmetrical between parties? If you have a £100,000 claim cap but they have unlimited liability, that's imbalanced.
Are consequential damages excluded? This is a clause excluding "loss of profits, loss of business, or other indirect damages." These exclusions favour the service provider but protect them against runaway claims. Make sure you understand what's excluded.
Who bears the risk if something goes wrong? If the supplier fails to deliver, who bears that risk? If you can't use the service, do you still have to pay? If something is damaged in transit, who's responsible?
Is there a warranty? Does the supplier guarantee that the service/product will work as described? For how long? What's the remedy if the warranty is breached?
Intellectual property and confidentiality
Who owns the work product? If the supplier is creating something for you (software, design, content), who owns the copyright or intellectual property? Can you use it, modify it, or resell it? Is there a license or a full transfer of ownership?
Is there a confidentiality clause? What information is covered? How long does the obligation last? Can you disclose to your team, your lawyer, your accountant?
Are there restrictions on what you can do with the contract itself? Some contracts say you can't disclose the terms publicly. Make sure you can tell your lawyer or accountant what you've agreed.
Conditions and limitations
Are there conditions precedent? Some contracts have conditions that have to be satisfied before either party is bound. "This contract is effective once you've opened a bank account with us." Make sure those conditions are reasonable and achievable.
What are the service levels? If this is a service contract, are there agreed service levels? "We'll respond to support tickets within 24 hours." If service levels are breached, what happens? Do you get a refund? Credits?
What happens if one party can't perform? Contracts sometimes have force majeure clauses that excuse performance if something unforeseen happens (war, natural disaster, pandemic). Is this clause broad or narrow? Can the supplier claim force majeure for almost anything, or is it specific?
Red flags
Vague language. If a clause says "reasonable efforts" or "best endeavours," it's vague. What does that actually mean? Push for clarity.
Unlimited liability. If the supplier has unlimited liability but you have a cap, that's imbalanced. Push for caps to be mutual.
Long notice periods. If you need to give 12 months' notice but they only need to give one week, that's imbalanced. Push for notice periods to be symmetrical or at least reasonable.
Unilateral changes. Some contracts let the supplier change the terms with notice. "We can change the price or terms by notifying you." Avoid this if possible. Changes should require agreement.
Automatic renewal. If the contract auto-renews unless you give notice, make sure you have a reasonable notice period. And set a calendar reminder — it's easy to miss renewal deadlines.
Survival clauses. These say that certain obligations survive termination of the contract. Check which clauses survive and for how long. If obligations that are expensive or onerous survive indefinitely, that's risky.
Questions to ask yourself
Is this contract fair to both parties, or does it heavily favour one side? Commercial contracts don't have to be perfectly balanced, but massive imbalances are a warning sign.
Can you afford the financial exposure? If something goes wrong, can you afford the cost? If it's beyond your risk tolerance, push back on the terms or the liability caps.
Do you understand all the key clauses? If there's language you don't understand, look it up or ask for clarification. Never sign something you don't understand.
Can you perform the obligations? If the contract requires you to do things you can't do, you'll be in breach. Make sure you can actually deliver what you're promising.
Is there exit flexibility? Can you get out if circumstances change? Or are you locked in for years?
Next steps
If you've gone through this checklist and you're still unsure about specific clauses, get a professional review. A contract review costs £99-£500, which is cheap insurance against a bad deal. If you've found serious issues but the other party won't move, consider walking away. A bad contract is often worse than no contract.
Need a second opinion? Upload your contract to QuickLegalCheck for a detailed, plain English analysis of the risks, missing protections, and recommendations for negotiation.