A contract is a legally binding agreement that is enforceable by law. It is important for parties to critically and diligently review the clauses in a contract or seek the services of their lawyer before execution, in other words, before appending a signature.
Here are 10 clauses to look out for in a contract before signing.
- The Parties – Ensure the parties are clearly defined and they are persons known to law. For instance, Nelson is not known to law but Nelson Your Surname as appears on your birth certificate or passport is known to law.
- Rights and Responsibilities – It’s important to know the rights and responsibilities of each party. Never speculate or rely on oral understanding.
- Consideration – Ensure that a monetary clause is clearly defined including the specific amount, the mode and manner of payment. If it’s in-kind compensation e.g services, state so as well
- Liabilities – Standard contracts provides what and who would be liable for any action arising from the contract.
- Confidentiality Clause – You need to know the information you are not permitted to disclose or other sensitive matters that require confidentiality.
- Remedies clause – If something goes wrong, you need to know the remedies available.
- Indemnity clause – This clause means a party agrees to protect another from liability or loss that may arise out of the contract. Take note!
- Reference to additional documents – If a contract refers to another document, kindly note and diligently review them. Do not assume.
- Termination – In what instances can the parties terminate the contract? It must be clearly stated.
- Dispute Resolution – how and where do parties intend to settle their differences or any dispute that arises out of or in connection with the contract? This must be clearly defined.
Ensure to diligently review every contract before signing or have a professional do that for you to avoid being a victim of individuals who generally want to scam innocent people. Engage with a lawyer here