Most small business owners sign contracts they have never fully read. When you are running the whole company, a ten-page vendor agreement is easy to skim and hope for the best. The problem is that the risky terms are rarely on page one. This checklist walks through what to look at before you sign, in the order that matters.
1. Confirm the parties and the term
Check that the legal names are correct, including the exact entity you are contracting with. Then find the term length and, more importantly, how the contract ends. Look for automatic renewal language and the notice window you must hit to cancel.
2. Read the payment terms closely
Confirm the price, the billing cadence, late fees, and any price-increase clauses. A “3% annual adjustment” buried in the fee schedule adds up fast over a multi-year deal.
3. Find the exit
Every contract should tell you how to leave it. Look for termination for convenience, termination for cause, cure periods, and any early-termination penalties.
4. Check liability and indemnification
These clauses decide who pays when something goes wrong. See our explainers on limitation of liability and indemnification for what to watch for.
5. Look for auto-renewal and notice traps
Auto-renewal clauses are the single most common way small businesses get locked into deals they meant to cancel. Read our guide on what an auto-renewal clause is.
Let software do the first pass
You do not have to catch every one of these by hand. AI contract review flags the risky clauses in seconds so you know where to focus.
ContractsIQ provides software-based contract analysis and is not a law firm or a substitute for legal advice. For decisions with significant legal or financial consequences, consult a qualified attorney.