Commercial contracts are at the heart of most business relationships. Whether you’re supplying goods, providing services, or entering a partnership, contracts set the rules and protect everyone involved. Yet many businesses rush to sign without fully understanding the details, which can lead to problems later on.

A well-crafted contract lays out clear expectations and protects your interests, but that means paying close attention to a few important areas.

First, the scope of work or services should be clearly defined. This means knowing exactly what is being provided, who is responsible, and when it should be delivered. Vagueness in this area often leads to disputes about whether obligations were met.

Next, payment terms are critical. You want to be certain how much will be paid, when payments are due, and what happens if payments are late. Hidden fees or unclear pricing structures can cause delays and damage relationships.

Liability clauses also deserve scrutiny. These specify who is responsible if something goes wrong, such as damage, injury, or financial loss. Sometimes liability is limited or disclaimed, which could leave your business exposed. Make sure these terms are fair and balanced.

Termination provisions tell you how either party can end the contract and under what conditions. Without clear termination clauses, you might find yourself locked into an unfavourable agreement or facing penalties for leaving early.

Many contracts also cover confidentiality and intellectual property. If sensitive information or original ideas are shared, the contract should spell out who owns what and how information is protected.

Finally, having a plan for resolving disputes is essential. Contracts often include dispute resolution clauses that specify whether disagreements should be negotiated, mediated, arbitrated, or taken to court. Knowing this upfront can save time and money later on.

To avoid pitfalls, keep these points in mind:

• Don’t rush to sign before reading and understanding every clause.

• Watch the fine print – important details often hide there.

• Don’t rely on verbal promises; only what’s written counts in law.

• Don’t just use generic templates. Make sure contracts fit your specific situation.

• Check for automatic renewal clauses so you’re not caught off guard.

Taking time to review and negotiate commercial contracts reduces risk and builds trust with your business partners. Where needed, expert advice can help you spot problem areas and ensure terms work in your favour.

At Owen Culliney Law, we help business owners navigate contracts confidently, making sure they understand risks and protections before signing. That way, you can focus on growing your business without costly surprises.