How to review a contract before you sign
A contract review is not about reading every word more carefully. It is about knowing which parts carry the real risk, and reviewing them in the right order. This guide covers how to approach a review, what to look for in each clause, and what UK lawyers typically charge.
Most people review a contract front to back, slow down when something looks complicated, and miss the clauses that matter most. The order you review in matters more than the speed. Here is how to do it in order of risk.
Why the order you review in matters
A contract is not organised by importance. It is organised by convention. Definitions come first. Boilerplate comes last. The clauses that determine your actual exposure sit in the middle, often in plain language that reads as routine until someone enforces it.
Reviewing front to back means you arrive at the liability cap on page 18 after you have already spent forty minutes on recitals, definitions, and service descriptions. By that point attention is lower and time pressure is higher. The clause that matters most gets the least scrutiny.
Reviewing in order of risk reverses that. You see the highest-exposure terms first, while your attention is fresh and there is still time to negotiate or walk away.
Liability and indemnity: where the exposure actually sits
The liability clause determines the maximum amount you can claim, or be claimed against, under the contract. Most commercial agreements include a liability cap, but what it is set at and which way it runs are the questions that matter.
A cap set at one month of fees is a very different commercial outcome from a cap set at twelve months of contract value if a significant incident occurs. A cap that only limits the other party’s liability to you, but does not limit your liability to them, is a one-sided arrangement that is worth understanding before you sign.
- What is the liability cap set at, and does it apply to both parties equally?
- What events are excluded from the cap entirely? Excluded events often include IP infringement and data breaches, which can be the highest-exposure incidents.
- What indemnities are you giving, and what triggers them? Indemnities can survive termination of the agreement.
- Does the contract include a consequential loss exclusion, and which party drafted it in their favour?
The UK government’s AI investment into NHS procurement is generating new contract types for health tech suppliers at scale. Suppliers are signing arrangements they have not seen before, under time pressure, on timelines that leave no room for uncertainty. The pattern applies across every fast-moving sector: technology outpaces the contracts, and liability terms drafted in haste create problems that only surface later.
Payment, pricing and exit terms
Payment terms and exit provisions are where the commercial risk hides. They are often presented as standard, but the detail matters considerably.
Automatic price increase provisions are common in subscription and SaaS agreements. A contract that allows the supplier to increase fees annually by CPI plus a fixed percentage, without requiring consent, can significantly change the economics of the agreement over a multi-year term. These provisions are easy to miss and difficult to renegotiate once the agreement is running.
Exit terms deserve equal attention. A 90-day notice period in an auto-renewing contract effectively locks you in for another full term unless you act well in advance of a date you may not have logged. Termination for convenience provisions, where they exist, give flexibility but often come with financial consequences worth understanding before signing.
- What are the payment terms, and what happens if you are late?
- Are there any provisions for automatic price increases?
- What is the minimum term, and when does auto-renewal kick in?
- What is the notice period to exit, and is there a termination for convenience right?
- What financial obligations survive termination?
What a contract review actually costs in the UK
UK lawyers typically charge between 150 and 500 pounds per hour for contract review, depending on their seniority and the complexity of the agreement. A straightforward commercial contract review might take two to four hours. Complex enterprise or regulated sector agreements can take considerably longer.
For businesses that sign contracts regularly, ad hoc review fees accumulate quickly. A fractional general counsel arrangement provides ongoing contract review as part of a fixed monthly engagement, without per-hour billing and without the delay of instructing a new firm each time a contract lands on your desk.
The cost of not reviewing a contract is harder to quantify but consistently higher. A missed liability clause, an auto-renewal you did not log, or an IP provision that assigned ownership you intended to retain are problems that cost significantly more to resolve than the review would have cost to commission.
IP, data and confidentiality provisions
IP and data provisions are where fast-moving sectors consistently get caught. They are often written as though they are administrative, but the obligations they create are substantive.
IP ownership clauses determine what you own and what the other party owns as a result of the commercial relationship. In a SaaS agreement, the question of whether the vendor can use your data for model training or product improvement is an IP and data question with significant commercial implications. In a consultancy or development agreement, the question of who owns the work product is fundamental and should be explicit.
Confidentiality obligations run in both directions and can extend well beyond the end of the agreement. The scope of what counts as confidential information, and any carve-outs to that definition, are worth reading carefully before you sign.
- Who owns any IP created under the agreement, and is that ownership clear?
- What can the other party do with your data or outputs?
- Does a data processing agreement need to be in place alongside this contract?
- What is the scope of the confidentiality obligation, and how long does it last?
Boilerplate and governing law: where binding terms often hide
Boilerplate clauses are named that way because they are assumed to be standard. In practice, the entire point of negotiating boilerplate is that it is the last place the other side expects you to look.
Governing law and jurisdiction determine which country’s courts apply if there is a dispute, and where a dispute must be resolved. This matters considerably if you are entering a contract with an entity in another jurisdiction. Force majeure provisions, entire agreement clauses, and variation provisions can all affect your rights in ways that are not obvious on a first read.
The entire agreement clause determines whether any representations made during negotiation are incorporated into the contract or disclaimed. If you were told something during the sales process that influenced your decision to sign, understanding whether that is captured by the contract is important before you do.
Frequently asked questions
How do you review a contract before signing?
The most effective way is to work in order of risk rather than front to back. Start with the liability and indemnity provisions, then payment, pricing and exit terms, then IP and data clauses, then confidentiality obligations, then governing law and boilerplate. This ensures you understand the highest-exposure terms before spending time on administrative provisions.
What should I look for when reviewing a contract?
The key things to look for are: the liability cap and which way it runs, indemnity obligations and what triggers them, payment terms and any provisions for automatic price increases, exit and termination clauses including notice periods, IP ownership and what you are actually licensing or assigning, data protection obligations, and any auto-renewal provisions with associated notice deadlines.
How much does a lawyer charge to review a contract in the UK?
UK lawyers typically charge between 150 and 500 pounds per hour for contract review, depending on seniority and complexity. A straightforward commercial contract review might take two to four hours. For ongoing contract support without per-hour billing, a fractional general counsel arrangement provides more cost-effective cover for businesses that sign contracts regularly.
What order should I review a contract in?
Review in order of risk, not page order. Start with liability and indemnity clauses, then payment and exit terms, then IP and data provisions, then confidentiality terms, then governing law, dispute resolution, and boilerplate. Leave the definitions section until you need it to interpret a specific clause.
When should I get a lawyer to review a contract?
When the contract value is significant relative to your business, when the other party has drafted it on their own terms, when the contract includes IP assignment or licensing provisions, when personal data processing is involved, when there are unusual or onerous liability or indemnity terms, or when you are entering a new type of commercial relationship. For businesses signing contracts regularly, ongoing fractional legal support is more efficient than ad hoc review.
Need a contract reviewed before you sign it?
We review commercial contracts for scaling SaaS and tech businesses, quickly and in plain English. We flag where the exposure sits and what to do about it before you commit.
Book a call: calendly.com/dhruve-eligaconsultancy
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