Written agreements, also known as contracts, are critical to good business practices. The best contracts clarify the essential details of the relationships among the parties, delineating the rights and duties of everyone involved. They also bind the parties by obligating them to perform certain tasks pursuant to the business deal. Failure to adhere to the responsibilities contained in the agreement will open the door to potential liability. Put simply, a poorly drafted contract exposes your organization to financial losses, litigation, and civil damages.
For this reason, it is important to have an experienced Houston business law attorney review your contract before you sign it, and in the case you are presenting the contract, we will be able to review it and potentially make changes to it before you present it to the other party. Contract review can also be conducted at other stages of your business relationships with other parties. Capstone Legal Strategies can examine the details of your agreements, identify options for altering them in your favor, and negotiate on your behalf for the best possible terms.
The Basics of Contract Review
When presented with a proposed contract, the first step you should take is to read the document closely and note any questions or concerns you have about the terms. There may be clauses in the draft contract that you do not understand or agree with. Once you have examined the agreement, you should consult legal counsel for a detailed review. We serve business clients in this capacity by taking the following steps:
- Understanding your business goals: Having a better idea of your business objectives will shape our analysis of the proposed contract, as well as our recommendations for modifying it. We therefore take the time to learn about your organization’s risk appetite and what you ultimately hope to achieve with the contract.
- Identifying problematic terms: With your business interests in mind, we then get to work finding errors, ambiguous language, and potential loopholes in the contract. All of these could unnecessarily expose your business to liability and should be addressed accordingly.
- Discerning opportunities for more advantageous terms: Conversely, there may be ways to strengthen the existing terms in a manner that is more beneficial to your business. Although contracts always present risks, they can also offer opportunities for striking better deals and stronger language that better protects you.
- Explaining unclear terms and clauses: Contracts are written in legal jargon which is not always clear but will become legally binding once executed. If you have questions about what various terms or clauses mean, we invite questions and will provide the answers you need to confidently move forward.
- Discussing liabilities and remedies: You will want a thorough understanding of the potential liabilities involved if you breach or default under the contract. We can also examine remedies to alleged breaches and defaults, including alternatives to litigation such as mediation. If these remedies are not already present in the contract we can recommend that they be added.
- Negotiating modifications with the other parties: Once we have completed the above tasks, we will compile a list of suggested changes to the contract which can safeguard your rights, interests, and overall objectives. After discussing these with you, we will then negotiate on your behalf with the other parties until a suitable agreement is reached.
Contract Review After an Agreement Is Executed
While contracts should be reviewed by an attorney before they are signed, this does not always happen. On the other hand, an agreement can be thoroughly vetted by legal counsel but later prove to be inadequate or outmoded. Contracts are intended to bind all parties involved, but they are not immutable. For various reasons, it may be time to examine the agreement and find ways to modify it.
To do so, our team takes the same general approach outlined above by considering your business needs and concerns, reviewing the existing contract, and then proposing changes to the other parties. If a suitable modification can be negotiated, we will draw up the necessary paperwork to effectuate the changes.
Reviewing the Contracts You Propose
Contract review is not necessarily a defensive practice. On the contrary, businesses need to ensure that the agreements they propose to other parties have been reviewed and adjusted as necessary. This is important for at least two reasons.
First, once the other parties sign the agreement, it goes into effect. It’s true that proposing a contract often opens the door to counterproposals and negotiations. However, there is a chance that the other parties might accept the contract as written and decide to execute it, which puts the agreement in force immediately. You need to make sure it is reviewed first.
Secondly, there is a general rule in contract law by which in certain instances, ambiguous terms and vague language are interpreted against the party that drafted the agreement. Put another way, when there are terms that can be reasonably interpreted in more than one way, disagreements over their meaning are usually resolved in favor of the parties that did not draft the contract. This makes it even more important to have an attorney examine your agreement.
Types of Contracts We Review
Our business law attorney is ready to review your contract, regardless of the size of your business, the industry in which you operate, or the nature of the agreement. We have extensive experience reviewing the following types of contracts, among others:
- Partnership agreements
- Commercial lease agreements
- Real estate purchase agreements
- Buy-sell agreements
- Service contracts
- Purchase orders/terms & conditions
- Bills of sale
- Shareholder agreements
- Operating agreements
- Franchise agreements
- Non-compete, non-disclosure, and non-solicitation agreements
- Warranties
- Merger and acquisition agreements
- Employment agreements
- Licensing agreements
- Private placement memorandums/subscription agreements
- Loan agreements
Contact Our Houston Contract Review Attorney
Has a contract been proposed to your organization, or are you in the process of drafting one to send to other parties? Do your existing agreements fail to meet your current business purposes? Regardless of the reason you need a contract to be examined, our Houston business lawyer is prepared to handle all aspects of the review process. Give us a call today to get started.