Before signing a business contract, check five things: who pays what and when, how either side can end it, who carries the risk if something goes wrong, who owns the work or data, and where a disagreement gets resolved. Read the back pages as carefully as the price and scope. Those terms can decide what a problem will cost you.
That applies to a vendor agreement, a commercial lease, or a customer contract. Graves Legal is Aaron Graves’s solo business-law practice in Lincoln, Nebraska, focused on contracts and transactions for companies from formation to exit. His approach is to be in the room before something breaks, not after.
1. Who pays what, and when is payment due?
Start with the full financial commitment, not just the headline price. Look for deposits, recurring charges, expenses, late fees, and any right to increase the price. In a commercial lease, check what you owe beyond base rent, such as operating expenses or maintenance obligations.
Then find the event that makes payment due. Is it signing, delivery, an invoice, or acceptance of the work? If payment depends on acceptance, the contract should explain who decides whether the work meets the requirements and how long that decision can take.
Check the scope alongside the payment terms. A clear price means little if the agreement leaves the deliverables open-ended. Look for a written process for approving extra work and its cost.
2. How can either side end the agreement?
Find the start date, end date, and renewal language. An automatic renewal may require notice well before the current term expires. Note the deadline, who must receive notice, and how it must be delivered.
Next, check whether either side can leave without a breach, meaning a failure to meet the agreement. If termination is allowed only after a breach, does the other side get time to fix the problem? That opportunity is often called a cure period.
Read what happens after termination, too. You may still owe fees, have to return information, or remain bound by confidentiality requirements. For a lease, consider any personal guarantee: a promise that can make you personally responsible for the business’s obligations.
3. Who carries the risk when something goes wrong?
Three terms deserve a close read here: liability, indemnity, and insurance.
- Liability limits restrict what one side may have to pay for a claim. Check whether the limit protects both sides and which claims fall outside it.
- Indemnity can require one party to cover specified claims, losses, or legal costs involving the other party. Read what triggers that duty and whether it includes paying for a legal defense.
- Insurance requirements describe the coverage a party must carry. Don’t assume your existing policy covers every obligation you accept in the contract.
Read these provisions together. For example, a contract might cap ordinary liability but exclude indemnity obligations from that cap. A low contract price doesn’t necessarily mean a low financial risk. If insurance is part of the deal, ask your insurance professional to check the requirements against your coverage.
4. Who owns the work, and who can use the data?
If you’re paying someone to create software, designs, written materials, or other work, don’t assume payment alone transfers ownership. Look for an express ownership provision or a license explaining how you can use the work.
If your business is providing the work, check whether the agreement also transfers rights to tools, templates, or materials you already owned. The contract should distinguish those existing materials from what you’re creating for this customer.
For data, look at who can access it, what uses are permitted, and what happens when the relationship ends. Consider whether you’ll need an export of business records and whether the agreement addresses return or deletion. Confidentiality language alone may not answer those questions.
5. Where and how will a disagreement get resolved?
Look for governing law, venue, arbitration, and attorney-fee provisions. Governing law identifies which jurisdiction’s law applies. Venue identifies where a dispute must be brought. Arbitration generally sends disputes to a private decision-maker rather than a court.
For a Lincoln business, a requirement to resolve a dispute in another state can add expense. A fee provision may also require one side to pay the other’s attorney fees under specified circumstances. Understand those terms before assuming you can afford to enforce the deal.
Why the back pages matter, and when to get a review
The boilerplate at the back is where much of the risk can sit. Those provisions control notice, remedies, and whether promises outside the written agreement count. If a salesperson’s assurance matters to your decision, ask to have it included in the agreement rather than relying on a conversation.
Legal review is worth considering when the commitment is large for your business, lasts a long time, is difficult to exit, involves a personal guarantee, or puts important work or data at risk. Broad indemnity obligations and terms you can’t confidently explain are other reasons to pause.
A short, low-cost agreement with clear duties and limited consequences may not need the same level of review as a multi-year lease. Before signing as is, ask whether you understand the realistic downside and can afford it.
To make a review useful, gather the full agreement, every referenced attachment, and the key promises made during negotiations. Tell the lawyer your deadline and what matters most to the business.
This guide provides general information, not legal advice for a particular agreement.
Have a contract in front of you? Contact Graves Legal to request a consultation before you sign.