How to Review a Business Contract

A six-step framework you can apply to any contract before you sign — from MSAs to freelance agreements to vendor terms. No law degree required.

Step 1: Read the whole thing once, end to end

Resist the urge to jump to the money. Read straight through with no pen. You're mapping the document — who the parties are, what's being exchanged, how long it lasts, and which sections look unfamiliar. Cross-references like 'subject to Section 12.4' tell you which clauses depend on each other.

Step 2: Confirm the basics are correct

Legal names, addresses, signing authority, effective date, and term length. A contract signed by the wrong entity (e.g. you personally instead of your LLC) can pierce your liability shield. If the term auto-renews, note the cancellation window — most disputes start when someone misses a 60-day notice.

Step 3: Map the obligations on each side

Make a two-column list: what you must do, what they must do. Vague obligations ('reasonable efforts', 'as needed', 'industry standard') belong to whichever side benefits from ambiguity — usually not yours. Push to replace them with numbers, dates, and deliverables.

Step 4: Hunt the high-risk clauses

Indemnification, limitation of liability, IP assignment, non-compete, termination, governing law. These are where lawyers make their money and where unreviewed contracts cost six figures. Read each one twice and ask: 'What's the worst case this allows?'

Step 5: Check payment and termination together

Payment terms (Net 30, milestones, late fees) and termination rights are linked. A 60-day termination clause with Net 60 payment means you can work two full months unpaid before you can walk away. Align the two so you're never owed more than one payment cycle of work.

Step 6: Mark up, then negotiate

Highlight every clause you want to change, draft your redlines, and send them back as a single counter-proposal. Going one clause at a time signals you'll keep negotiating forever — clients hate that. One redline, one round, signed.

Red flags worth refusing

If you see any of these and the other side won't budge, walk. The contract isn't worth the risk it shifts onto you.

Unlimited indemnification (you cover all their losses, no cap)
Mandatory arbitration in a city you don't live in
Auto-renewing terms with a short cancellation window (less than 30 days)
Broad IP assignment that covers work outside the contract
'Pay when paid' clauses that make your fee depend on the client's customer paying them
Non-competes that cover the entire industry or have no geographic limit

Skip the manual review

Contract Review runs the same six-step framework above on any contract in under a minute — flagging risky clauses, suggesting rewrites, and explaining everything in plain English.

Analyze a contract free