10 Things You Should Check Before Signing a Contract
Recently, I attended Startup Grind’s NYC talk with Jon Steinberg, the President of BuzzFeed. BuzzFeed appears to have mastered the “art” of creating viral content. They unveiled “CNN BuzzFeed,” a YouTube channel based on content from CNN, including archival and current content, that is designed to be shared across social networks.
During the talk, Mr. Steinberg stated that he wished he had a law degree (even over his MBA). Why? Because he devotes endless hours reviewing contracts. He expressed dismay about what to look for.
Here are 10 things you should check before signing a contract:
- Adequate due diligence about the vendor and product (if any) has been done and documented.
- The parties are accurately identified and contact information is clear.
- There is an effective date and, if needed, an end date.
- The document accurately reflects your company’s understanding of the arrangement.
- All people at your company with roles in the contract’s performance are aware of their obligations.
- All financial provisions are clear and correct, and budgetary authorization has been obtained.
- The obligations of each of the parties are adequately described.
- Your company is able to perform its obligations under the contract.
- The appropriate signatory has been determined.
- The benefits and risks of the contract have been assessed and are understood.
There are other factors to consider, but at a minimum, solos and small business owners should check these 10 things before entering into a contract to limit their risk of facing costly civil litigation and the potential for bad press.
ABOUT THE AUTHOR:
Fred Abramson is a New York based attorney specializing in business law and litigation. In addition to advising small business owners, he has successfully represented a range of New York companies, from non-profits to executive search firms. You can find him on Twitter: @fredabramson, or check out his website and blog.