Preparing a Commercial Contract for Legal Review

What should a contract review brief include?

A useful contract review brief contains the latest draft, the commercial objective, the parties involved, related documents, the negotiation history and the decisions the business needs to make. Explain what will be supplied, how payment works, the expected timetable and which terms are still open. A lawyer can then review the document against the intended transaction rather than infer the arrangement from clauses alone.

Start with the commercial arrangement

Describe the deal in plain language before listing legal questions. Identify who will provide the goods or services, who will receive them and who will pay. Explain the deliverables, acceptance process, dependencies and intended duration. For a service agreement, distinguish an ongoing service from a defined project. For a supply agreement, explain delivery, inspection and rejection arrangements. Note any commercial assumptions that are not yet reflected in the draft.

Send the complete document set

Provide the current editable draft and identify whether it came from your business or the counterparty. Include schedules, statements of work, purchase orders, pricing tables and documents incorporated by reference. Where an existing agreement is being amended, include the signed agreement and earlier amendments. A reference to another document can affect the practical operation of the contract even where the document itself is not attached to the draft. Keep executed copies clearly separate from working versions.

Identify the parties and the decision-makers

Confirm the proposed contracting entities using their full legal names. A brand name may be different from the entity intended to take on the obligations. Tell the adviser whether a group company, subcontractor or distributor will perform part of the work. Identify the business owner responsible for commercial decisions and the person coordinating the review. If signing authority, internal approvals or counterparty details are uncertain, flag them as open questions rather than filling the gaps with assumptions.

Set out the issues requiring a decision

Useful questions concern practical consequences. When can fees change? Who decides whether a deliverable is accepted? What happens if an input arrives late? What assistance is needed when the arrangement ends? Which intellectual property is supplied by each party and what will be created during performance? Does either party process personal data? Group the questions by business owner so that finance, operations and technology colleagues can supply the facts relevant to their responsibilities.

Separate agreed terms from negotiating positions

Prepare a short issues list that records the current proposal, your preferred position, the reason for it and the person authorised to decide. State which points have already been agreed commercially and which remain negotiable. Do not describe a counterparty’s proposal as agreed merely because it appears in a draft. If a liability cap, exclusivity arrangement or termination right is particularly important, explain the commercial exposure rather than asking for a clause to be “standard”.

A fictional review brief

A software services company is asked to sign a customer’s twelve-month agreement. Its brief states the subscription price, implementation milestones, customer dependencies, support hours and the proposed go-live date. It attaches the order form and statement of work and flags three decisions: acceptance of implementation, ownership of customised deliverables and assistance at termination. This fictional example illustrates the level of operational context that helps a review; it does not suggest that the same terms are suitable for another agreement.

Agree the timetable and review process

Give the requested response date and explain any signing or operational deadline. Identify the current draft by date or version and keep one coordinated set of instructions. Ask how comments will be presented and who will consolidate business responses. A first review may identify missing facts or documents that affect the next stage. Leave time for those questions, internal decisions and counterparty negotiation rather than treating delivery of a marked-up draft as the end of the process.

Preparation is different from an enforceability assessment

A complete brief helps the review but does not establish that an agreement is valid or enforceable. Section 10 of the Indian Contract Act addresses, among other matters, consent, competence, lawful consideration and lawful object; it also preserves applicable requirements under other laws concerning writing, witnesses and registration. The assessment of a particular arrangement depends on its facts and relevant law. Do not treat an online template or checklist as a conclusion about your contract.

Before sending the brief

Check that all referenced schedules are present, the latest draft is identified, sensitive material is shared through the agreed channel and open questions have named owners. An initial website enquiry should contain only a brief, non-confidential description. Detailed documents should be shared after the firm confirms the engagement and appropriate arrangements. The purpose of preparation is to make the advice more informed, not to replace the advice.

References

• Indian Contract Act, 1872 — India Code