What to Look For When Reviewing a Contract Before You Sign

Before you sign a business contract, check six things: what you must deliver or pay, what you receive in return, how and when either side can end the deal, who bears which risks (indemnities, liability caps, insurance), which law governs, and where disputes will be decided. A contract review is a structured reading against those questions, looking for gaps, vague wording and one-sided terms while you can still negotiate.

What is a contract review, and why do it before signing?

A contract review is a careful reading of the draft against your commercial intentions and the governing law, ending in a list of risks and suggested changes. It matters most before signing because a contract validly entered into is binding and can be changed only by its own terms or by agreement (UNIDROIT Principles 2016, Art. 1.3). After signature your leverage is gone; before it, a change is just a redline.

A review is also the moment to check that the deal you discussed is the deal on paper. Many contracts contain a “merger” or “entire agreement” clause: under the UNIDROIT Principles, such a clause means the written contract cannot be contradicted or supplemented by earlier statements or agreements, although they may still be used to interpret it (Art. 2.1.17). A promise made in an email or meeting that is not in the final text may not help you.

Does a contract have to be in writing to be binding?

Often not, but it depends on the governing law. The CISG says a contract for the international sale of goods “need not be concluded in or evidenced by writing” (CISG, Art. 11), and the UNIDROIT Principles take the same approach (Art. 1.2). Under Taiwan’s Civil Code, a contract is formed when the parties reciprocally declare their concordant intent, expressly or impliedly; if they agree on the essential elements, the contract is presumed formed even if minor points are open (Civil Code, Art. 153).

Two consequences for a reviewer:

• Requirements differ by legal system. Checklists that list “consideration” (each side giving something of value) come from common-law systems. The UNIDROIT Principles say a contract is concluded “by the mere agreement of the parties, without any further requirement” (Art. 3.1.2), and Taiwan’s Civil Code Art. 153 does not list it either. Do not apply one country’s checklist to a contract governed by another country’s law.
• You can be bound before the “final” signature. If the essentials are agreed in correspondence, a contract may already exist. Mark drafts and term sheets clearly as non-binding where that is what you intend.

Which law governs the contract, and where will disputes go?

The governing-law and dispute-resolution clauses decide how every other clause is read and whether a win can be enforced, so a review checks them first.

• Governing law. Freedom to choose it is the starting point of the HCCH Principles on Choice of Law in International Commercial Contracts (Art. 2), though mandatory rules of other laws can still apply. If the contract is for the sale of goods between businesses in different countries, the CISG applies automatically when both countries are Contracting States, or when the conflict rules point to the law of one (CISG, Art. 1(1)); the parties may exclude it (Art. 6). UNCITRAL lists 97 parties to the CISG (status page, checked 28 October 2026). The United Kingdom is not one of them.
• Court. An exclusive choice of a court is respected, and the resulting judgment recognised, between the Contracting Parties to the 2005 Hague Choice of Court Convention (HCCH, Arts. 5, 6 and 8). It has 39 Contracting Parties, including the European Union, the United Kingdom, Singapore and Mexico (HCCH status table, last updated 27 November 2025). China and the United States have signed but not ratified it.
• Arbitration. Arbitral awards are enforceable in the 172 parties to the 1958 New York Convention (UNCITRAL status). Taiwan is not on that list; it recognises foreign awards under its own Arbitration Act.

How enforcement works after a breach is covered in Beyond the signature: what contract enforcement really means.

What should a contract review checklist cover?

A review should cover each of the clauses below and ask the same question of each: what happens to us if this goes wrong?

Clause	What to check	Read more
Parties and definitions	Correct legal entities; defined terms used consistently
Scope of work or goods	Specific deliverables, standards and acceptance tests; no open-ended “and related services”
Price and payment	Amount, currency, due date, invoicing, late-payment interest, taxes, bank charges	Payment terms
Term, renewal and termination	Automatic renewal and its opt-out window; notice periods; termination for convenience and for breach; what survives
Indemnities and liability caps	Who covers which third-party claims; caps; exclusions of indirect loss; carve-outs	Indemnification clauses
Confidentiality and IP	Definition of confidential information, duration, return or destruction; who owns what is created	Confidentiality and NDAs
Force majeure	Which events excuse performance, notice duties, what happens if the event lasts
Governing law and disputes	Which law; court or arbitration; seat and language; whether a judgment or award can be enforced where the other party has assets	Contract enforcement
Boilerplate	Entire agreement, amendments in writing, notices (addresses and email), assignment, language versions

Which contract terms are red flags?

The most common red flags are terms that let one side change, escape or shift the deal without the other’s agreement:

• Unilateral rights to change terms or prices, or to suspend performance at will.
• Vague performance standards (“reasonable efforts”, “promptly”) where a date or measurable standard is possible.
• Automatic renewal with a short or hidden cancellation window.
• Broad one-way indemnities or uncapped liability on your side only.
• Exclusions of the other side’s liability for its own failures.
• A forum far from you or an arbitration clause whose cost is out of proportion to the deal.

Several legal systems police one-sided terms in standard forms, but in different ways:

Rule	Where it applies	What it says
Surprising terms	UNIDROIT Principles, where the parties chose them (Art. 2.1.20)	A standard term the other party could not reasonably have expected is not effective unless expressly accepted
Obviously unfair standard terms	Taiwan (Civil Code, Art. 247-1)	Terms in pre-prepared contracts that release the drafter’s liability, increase the other side’s, or restrict its rights are void if obviously unfair
Written standard terms of business	England, Wales and Northern Ireland (Unfair Contract Terms Act 1977, s. 3)	The party using its standard terms cannot exclude liability for its breach, or reserve the right to perform substantially differently or not at all, unless the term is reasonable
Unclear terms	UNIDROIT Principles (Art. 4.6)	Unclear terms supplied by one party are interpreted against that party

These rules are a safety net, not a plan. Each requires a dispute, legal argument and often a court to decide; negotiating the wording before signing costs far less.

Who should review a contract?

The people who will live with the contract should read the parts they will have to perform, and someone who knows the governing law should read the whole. In practice:

• The business owner or deal lead checks that the document matches the commercial deal.
• Finance checks price, payment timing, currency, tax and late-payment terms.
• Operations or technical leads check that deliverables, timelines and service levels are achievable.
• A contract reviewer familiar with the governing law checks risk allocation, enforceability and the dispute clause, and proposes wording.

How do you make a contract review effective?

Give it time and read every page, including schedules and documents incorporated “by reference”. Then:

1. Write down what you think the deal is (price, scope, timeline, exit) and compare it with the text.
2. Walk through scenarios: late delivery, non-payment, a third-party claim, a data leak, one side wanting to leave early.
3. Mark every unclear term and every term you would not accept if it were used against you.
4. Propose specific replacement wording rather than general objections.
5. Keep a record of what was agreed in negotiation, and make sure it is in the final text.

Pressure to sign immediately is itself a reason to slow down.

Frequently asked questions

Can a contract be changed after signing?

Yes, if both parties agree, or if the contract itself provides a mechanism. Many contracts require changes to be made in writing; under the UNIDROIT Principles such a clause is effective, but a party may lose the right to rely on it if its conduct led the other to act differently (Art. 2.1.18). Record every change formally.

Is a “letter of intent” or term sheet binding?

It depends on its wording and the governing law. If the essential terms are agreed, a court may find a contract was formed (see Taiwan Civil Code Art. 153). State expressly which parts are binding (often confidentiality and exclusivity) and which are not.

How much does a contract review cost?

It depends on the length and complexity of the contract. For our contract review, you receive a cost estimate and delivery date before work starts.