Supply chain professionals and most business people enter into contracts on a regular basis. They sign procurement agreements, vehicle and equipment leases, maintenance contracts, banking documents and several other contracts in line with their business. Some of these contracts are constructed in simple terms while others are incomprehensible. It is very common for professionals to just sign the contract without really reading, knowing and understanding the obligations and stipulations in the contract. Things to look out before you sign Every professional should learn the tricks in reviewing the contract. Every businessman must remember to review the stipulations in the contract before signing. Moreover, it is a good practice to periodically review existing contracts in your supply chain such as logistics contracts, banking documents and procurement agreements to determine whether they still meet your company’s needs. Atty. Joanne Cassidy, a Huston Business Lawyer, said that a contract may merely sound as a simple agreement between to or more persons to do a particular thing, but when obligations are buried in the find print in the middle of a lengthy document it may put the other party in jeopardy. Here are the things that you need to have an extra eye before signing any contract according to Cassidy: 1. Double Check the Business Terms The business terms of the contract may refer to the price, amount, duration, delivery method etc. Every business professional should double check the business terms to determine whether it accurately reflects the agreement of the parties. 2. Fill in the Blanks Take extra caution in completing all the blanks on any pre-printed form because someone may write unfavourable stipulations that can cause injury to your business operation. Moreover, be sure to have your initials on any deletions or changes on a contract. 3. Automatic Renewals Examine if automatic renewals are present in the contracts. Check your contract whether they contain the following:
- Do you have to give notice if you do not want to renew?
- Are there penalties if notice is not timely given?
- Is renewal on the same terms as the original agreement? Are there price increases?