Contract Review Checklist

All contracts have basic requirements that make them binding and effective. Names, terms, representations, warranties, intellectual property use, indemnification clauses, restrictive covenants, breach or default remedies constitute a properly constructed contract and can help a business minimize costly litigation in the future.For your convenience, we provide the following checklist as an outline of essential contract elements. Not all contracts require each provision listed, some contracts will require less, some will require provisions not listed here.

Basic Contract Checklist

  1. Correct names and addresses of parties
  2. Effective date of the contract
  3. Relationship of the contracting parties
    • Independent contractor
    • Customer/supplier
    • Manufacturer/customer, etc.
    • Consultant/service provider
    • No joint venture or partnership formed
  4. Purpose of contract
  5. Scope of project
  6. Services/goods to be provided
    • Consulting
    • Professional
    • Manufacturing
    • Warehousing/shipping
    • Services (computer, electric, plumbing, etc.)
  7. Work for hire
    • Customer to own all work product/IP of contractor developed over course of performance of contract
  8. Ordering and delivery terms (if applicable)
    • Procurement contract
    • Order by PO subject to terms of contract (i.e. master services agreement)
    • Delivery
  9. Consideration/payment terms and conditions
    • When due (i.e. upon execution, net 15 days, etc.)
    • Fees, interest, penalties, costs of collection, breach and default, with or without notice or opportunity to cure, if non-payment
  10. Exclusive/non-exclusive
  11. Term
    • Set term
    • Automatic renewal
    • Renewal upon notice
    • Terminable at will at any time upon notice
    • Terminable prior to term end only upon default
    • Opportunity to cure any breach
  12. Representations and warranties of parties and survival of same
  13. Ownership and use of intellectual property (IP)/products/formulas
    • Warranty that IP owner or licensee has right and authority to use or license
    • Indemnity provision for infringement, including suit by third parties
  14. License of any IP to any party
    • Specific term
    • Exclusive/non-exclusive
    • Term
    • Limited/non-limited
    • Sub-licensable
    • Assignable/non-assignable
    • Revocable/revocable prior to end of any term upon certain event(s)
  15. Inspection/non-conforming products
    • Deemed accepted if no notice of defect within ___ days
    • Upon notice of defect or non-conforming product(s), opportunity to contest or cure
  16. Disclaimer of warranty of merchantability or fitness for a particular purpose or other limitations on customer reliance
  17. Indemnification by both parties for
    • Breach of agreement
    • Breach of reps and warranties
    • Third party claims caused by acts or omissions of indemnifying party
    • Suits by party employee or contractor (i.e. unemployment, worker’s compensation)
    • Suits by any government entity for taxes, withholding, safety, etc.
  18. Notification of claims/procedure for third party indemnity claims
  19. Confidentiality and non-disclosure – prohibitions and enforcement
    • Prohibit use and disclosure of terms contract, customer lists, products, IP, etc.
    • Party in receipt of or exposed to confidential information agrees injunctive relief without showing of damages or threat of damages and without bond appropriate in event of breach or threatened breach (similar provision to apply for party misuse of IP and/or non-solicitation/noncompete)
  20. Non-solicitation/non-compete – prohibitions and enforcement
    • Prohibit solicitation of customers/clients/patients, etc.
    • Prohibit solicitation of employees
    • Prohibit competing with certain people, certain market segments, certain activities, etc.
  21. Events of Default
    • Non-performance or faulty performance with or without cure
    • Non-payment with or without cure
    • Bankruptcy, receivership, etc.
    • Corporate dissolution/change in control
  22. Opportunity to cure breach upon written notice of same
  23. Remedies and enforcement of rights in the event of breach
    • Monetary damages
    • Specific performance
    • Injunctive relief
    • Liquidated damages
    • Cumulative remedies
  24. Limitation of liability (limit to amount paid, no special, consequential or incidental damages)
  25. Insurance
    • Workers compensation
    • CGL
    • Specific risk insurance
    • Party to be additional insured
  26. Notices
    • Where/how/when effective
  27. Entire agreement (merger clause) which cannot be amended except in writing by parties
  28. Severability
  29. Counterparts and email/facsimile signatures
  30. No waiver
  31. Assignability/change in control provisions
  32. Third party beneficiaries
  33. Headings not part of contract
  34. Governing law
  35. Dispute resolution (mediation or arbitration or both or none)
  36. Exclusive venue/forum/jurisdiction for disputes
  37. Reciprocal attorney fee provision
  38. Force Majeure (contract requirements may be suspended by disaster, act of war, act of God, etc.)

Contact Brothers Business Law For A Consultation To Learn More

Call our firm at 615-942-5168 or email us to discuss your contract needs or commercial law questions.