Do you know what to look for in a contract?

On Behalf of | Mar 5, 2020 | Business Law | 0 comments

Contracts are integral parts of many transactions and agreements. Whether you are purchasing a home or outsourcing services for your business, a valid contract is something everyone in the Rockford area should understand.

If you are not familiar with legal contracts, you may not know what to look for to ensure everything is on the up and up. Without basic knowledge, you may get stuck with a useless or non-enforceable contract. Keep yourself from getting shorted or worse by understanding what you should look out for before signing any contract.

Typographical errors

Some of the most fundamental mistakes in contracts are simple typos. While it may seem like this is not a big deal, in reality, this type of error may wind up costing either party. Consider the case that you thought you signed a contract for a particular dollar amount only to later discover the person who prepared the document added an extra zero. You may find yourself in court trying to prove that the price in the contract is wrong. Therefore, pay extra attention to names, addresses and amounts.

Incorrect definitions

Most standard contracts have a section defining the common terminology in the document. If the transaction is for the purchase of property, the definitions may give an address or recording information to identify it. You must take a close look at the definitions and ensure that they are correct before you sign on the dotted line. Otherwise, the contract may not hold up against a challenge.

Inaccurate agreements

A contract sets forth a legally binding agreement between parties. The document must therefore explain that agreement and the terms clearly. Check to ensure that these are correct. Misunderstandings may lead to a significant mistake in the contract agreement. This can occur due to a simple miscommunication between you and the other party before drafting the contract.

The key to contracts is to review them carefully. Have a trusted co-worker or friend also read it to catch things you may miss. A failure to do so may mean you forfeit the right to challenge anything erroneous after signing.