Legal: Watch your language

Q. What parts of a contract should I review before signing?
Friday, April 24, 2015

A. You should read and understand the entire agreement. A well-written contract can go a long way in helping you reduce risk and manage resources. Likewise, a poorly written contract can spawn financial and legal issues.  

Before you sign the contract, take a few minutes to make sure that it accurately describes your intended relationship with the other party. Does the language specify what each party is required to do? Are all obligations included? Is the amount and method of compensation correct? 

Most businesses do a great job negotiating and reviewing the parts of the contract that cover the item or service provided and its cost. Unfortunately, ignoring other parts of the contract can lead to unexpected issues down the road.  

For example, the indemnity clause is the part of the contract in which one or both parties commit to compensate the other for liability, loss, or harm arising out of the contract. Watch out for language that is one-sided in favor of the other party; if this occurs, request reciprocal language to protect your interests. This is a reasonable request; the other party’s refusal to include such language is typically a red flag.

Additionally, “auto-renewal” clauses operate to automatically renew the agreement on the anniversary date unless either party notifies the other that they do not want to renew the contract under its current terms. The notice date is typically 60-90 days before the contract end date. Track the renewal and notice dates, and review the contract so you are not stuck with a contract you no longer want. And if you intend to terminate the contract, follow the notice requirements exactly as stated.

Jill Vogel is senior health care attorney at Brown & Fortunato, P.C. Reach her at