Many commercial disputes do not begin with a genuine disagreement between the parties. They begin with a contract written in a hurry, copied from an old template, or signed after a quick read of the first page. The contract is ultimately the reference point for any dispute, and whatever it does not state clearly is hard to prove later. An hour of careful review before signing can save you months of dispute.
First: Confirm the Parties and Their Capacity
Start with the basics that many people skip. Is the other party an individual or a company? Does the name written in the contract match the commercial registration? Who is signing on behalf of the company, and do they actually have authority to sign?
- Request a copy of the other party's valid commercial registration.
- Verify the signatory's authority through the articles of association, a partners' resolution or a power of attorney.
- Make sure the official addresses for notices are written down.
Second: A Clear Subject Matter and Clear Obligations
General phrases such as "providing the agreed services" or "supplying the required goods" open the door wide to disputes. The contract should state precisely what will be delivered, to what specifications, within what period, and what the standard for acceptance or handover is.
- Attach a technical schedule or a bill of quantities and specifications where needed.
- Set delivery dates and implementation milestones with clear dates.
- State what happens if either party is late or if performance does not meet the specifications.
Third: The Price and the Payment Mechanism
Review the contract value and whether it includes VAT, the payment dates and the conditions for each payment falling due, and the documents required to release each instalment. Pay attention to clauses on price increases or additional work, as these are among the most common sources of dispute.
Fourth: The Clauses That Decide Your Position in a Dispute
These clauses are usually read in a hurry because they come at the end of the contract, even though they matter most when things go wrong:
- Termination: when each party may terminate, with what notice, and how termination affects amounts owed.
- Limitation of liability and indemnity: is there a cap on compensation? Is indirect loss excluded?
- Liquidated damages: is the amount reasonable and proportionate to the expected loss?
- Confidentiality and ownership: who owns the deliverables and the data after the contract ends?
- Governing law and dispute resolution: will disputes go to the competent courts in the Kingdom or to arbitration? And where?
Fifth: Common Mistakes We See Often
- Relying on a ready-made template that does not suit the nature of the deal.
- Agreeing on amendments verbally without recording them in a signed addendum.
- Signing a version that differs from the last negotiated draft.
- Ignoring schedules and attachments even though they form an integral part of the contract.
- Not keeping an original copy signed by all parties.
A good contract is not written for the days of agreement; it is written for the day the parties disagree.
Legal review of a contract is not a formality; it is an investment in the stability of the business relationship. If the deal is large or long-term, it is worth having a legal adviser review it before signing, not after a problem appears. Our firm would be glad to help whenever you need it.