# Business Contract Review: What Should a California Lawyer Check?

## Why review a contract before signing?

A signed contract can determine payment rights, exit options, ownership of work product, and the cost of a dispute long after the parties have forgotten their initial conversations. A legal review is not limited to proofreading. It tests whether the written agreement matches the commercial deal, allocates risks deliberately, and can actually be administered by the business.

## Confirm the parties, scope, and deliverables

Start with the correct legal names and capacities of the parties. For services or products, define the deliverables, acceptance criteria, dependencies, deadlines, and change-order process. Ambiguous scope is a common source of disputes: one party believes additional work is included while the other expects an additional fee.

## Examine payment terms and financial exposure

Review deposits, milestones, invoicing, late fees, expense reimbursements, taxes, setoff rights, and disputed invoices. Check whether payment is conditioned on subjective approval. For recurring arrangements, confirm renewal dates, price increases, and minimum commitments. Model the worst-case exposure rather than focusing only on the headline price.

## Look closely at indemnity and liability limits

An indemnity clause may shift third-party claims, defense costs, or liabilities that exceed the contract value. A limitation-of-liability clause may cap damages, but its exclusions can swallow the protection. Examine the interaction among indemnity, insurance, warranty disclaimers, consequential-damages waivers, and any uncapped obligations.

## Protect confidential information and intellectual property

Determine who owns preexisting materials and newly developed work. A license is different from an assignment. Confidentiality provisions should specify permitted uses, exclusions, disclosure obligations, and return or destruction of information. Technology and marketing contracts often need special attention to data access, security incidents, and deliverable ownership.

## Plan for default, termination, and disputes

Ask what happens if a deadline is missed, the relationship deteriorates, or a party becomes insolvent. Cure periods, termination for convenience, transition assistance, and payment on termination can be more valuable than aggressive remedies. Governing law, venue, arbitration, attorneys’ fees, and notice methods affect the practical cost of enforcement.

## What should you bring to a contract-review consultation?

Provide the complete draft, exhibits, prior versions, relevant emails, and a short explanation of your business goals. Identify the clauses you are most concerned about and your negotiating leverage. A focused review can distinguish essential revisions from points that are commercially negotiable.

## When should you consult a California business attorney?

Consider obtaining legal advice before signing, issuing a formal notice, accepting investment funds, or committing to a transaction structure. The appropriate approach depends on the documents, the parties’ leverage, and the specific facts. Alex Nahai Law assists businesses with contract, corporate, financing, and transaction matters. Contact the firm to discuss your circumstances.

*This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship.*