What You Should Know Before Signing Any Contract

Anytime you are in the position to sign a contract, this is a more involved process than simply signing on the line. Your signature on a contract becomes a significant legalized commitment. Contracts establish a legally binding agreement between two or more separate parties as a means to proceed with clarity, fairness, and accountability. Proactive planning with a mutually agreed upon contract provides the framework for relationships or transactions. Clearly communicated terms of responsibilities are defined to be accepted, understood, and adhered to in order to minimize disputes concerning deliverables, payments, timelines, or other valid risk factors. There's no need to frantically scribble your signature on a contract just because it was passed along to you to sign. Remember to take your time to thoroughly read and understand the terms and conditions of the contract. If you come across complex or questionable wording, consult with a lawyer or reach out to the other party for clarification to ensure your complete understanding of expectations. We typically sign contracts and agree to terms and conditions without so much as a glance. No more—here's what you should know before signing any contract.

This content is not legal advice and may contain affiliate links.

What You Should Know Before Signing Any Contract

Before we even begin to explore the best practices for working through a contractual agreement, it's important for me to state that I am not providing legal advice. As a small business owner, I've learned a great deal of information from personal experience and I'm paying it forward by helping you gain a basic understanding of contracts. Knowing the significant financial, legal, or personal threats to our success that we may encounter, a legally-binding contract and a consultation with a lawyer before signing can be a worthwhile investment.

Moving forward with a working knowledge of basic contract protocol ensures informed decisions and protects your interests. Transparent contracts provide legal protection rights and outline all obligations to be observed for both parties. Within a properly drafted contact the roles, responsibilities, and expectations of each party involved are expanded upon to reduce the chance of misunderstandings and to define commitment terms. 

Establishing trust within a partnership by drafting and signing a contract focusing on compliance with legal and regulatory standards will reduce the need for a legal course of action. Most importantly, terms of a contract are enforceable by law in case of any breach of terms and indicating procedures to be followed if terms are violated. Coming together on common ground will help resolve conflicts effectively, fairly, and hopefully without costly legal action.

Beware when negotiating terms of a contract because not all contracts are fairly drafted or necessarily in your best interest.

Some contracts may contain unfair terms contained in clauses that may seem more favorable toward one of the parties. Search for clauses referencing non-compete agreements, exclusivity, automatic renewal, termination penalties, or

indemnity clauses which could leave you responsible for unexpected expenses or liabilities.

During your review of a contractual agreement, always check to see that the is drafted contract is actually completed in full with all terms in writing with all required documents included and accurate. Look for any verbal agreements that have not been included in the contract as these factors may not be enforceable in the written agreement. Identify (and possibly draw a line through) any blank spaces that could allow details to be completed without your approval. 

Hold out before adding your signature to a contract, because some contracts are negotiable, read, review, and request any changes that better align with your needs. Understand, there should always be though given to the binding nature and legal implications of the possibility of legal action and the court

jurisdiction and laws governing the contract. 

Ask for the professional help you need. Consider consulting with or hiring an attorney to negotiate on your behalf. Once you're ready to sign a contract, always keep a signed copy of the document for your records in the event of a dispute.

Before Signing the Contract- 

Do 

- take time to read the entire contract.
- confirm all negotiated items are defined in contract terms.
- ask for an explanation of any unclear details in the contract.
- insist that vague language is clarified for basic interpretation.
- label any attachments to be included in the contract.
- note the contract is binding once countersigned and distributed to all parties.
- obtain initials from all partied for adjustments made to the original contract.



Don't

- assume about any details noted in contract terms.
- expect the clarification of terms after signing the contract.
- add changes after all parties have signed the contract.
- accept revisions to the contract that has not been rewritten to incorporate revised terminology or clauses.
- assume without confirmation that a emailed or e-signed document is legally binding. 
- accept a signed contract unless you have verified the signing party is authorized to do so.

As the owner of the digital content published by Creative Learning Center Studios, I am compensated to provide my opinion on products, services, websites and various other topics. This content may contain affiliate links. Even though, as the writer/owner of this blog receiving compensation for posts or advertisements, I will always give my honest opinions, findings, beliefs or experiences on those topics or products. This content abides by word of mouth marketing standards. I believe in the honesty of relationship, opinion and identity. The views and opinions expressed on this blog are purely my own. Any product claim, statistic, quote, or other representation about a product or service should be verified with the manufacturer, provider, or party in question. As an Amazon Associate I earn from qualifying purchases.