If you have ever had a contract dispute, you no doubt came face to face with the exact wording contained in that contract. The terms and wording in any contract might one day work against you and make you wish that you had read it more carefully before signing.
While it may sound basic, always read and understand all contract terms and language before signing. The time to ask questions, or ask for changes, is before you sign the document, not after. It may save you time, trouble and expense down the road.
“I have seen many contract disputes where a client who is accused of being in default of a contract has asked for our help,” says Eldon McAfee, attorney with Beving, Swanson & Forrest, in Des Moines. “Even if you are told something different by the other party, when push comes to shove, it’s what’s in the contract that counts.”
An attorney can help explain terms and alert you to potential problems contained in the document. McAfee reviews many documents on behalf of clients and believes that having an attorney review a contract is always a prudent step. However, don’t stop there.
“What it all comes down to is, you need to know the requirements of the contract as well or better than I do,” McAfee says. “While I can tell you about issues that I believe may be potential problems, you need to thoroughly understand the day-to-day workings of the contract.”
Before signing on the dotted line, McAfee urges clients to take the necessary time to fully understand all aspects of the contract. “Know what is required of you and know the business and financial history of the other party,” he says. “If it’s in the contract, you must do it; if it’s not in the contract, it isn’t part of the agreement.”
Make sure to get both parties to agree to any amendments in writing and have them added to the contract. “For example, if the other party tells you that you do not have to worry about performing a particular function as outlined in the contract, get it in writing,” McAfee says, “because if a problem surfaces down the road, it will depend on what’s in the written agreement.”