Reviewing a commercial contract
Commercial contract review is a structured exercise. Most reviews can be completed faster by walking through the same set of risk areas in the same order. This workflow covers the standard 8 steps.
This is an 8-step workflow for reviewing a commercial contract in Australia. It works for supply agreements, services contracts, NDAs, licensing agreements, and most other standard commercial documents. Use it on every contract review to ensure consistent coverage.
Before you start
- The contract document (PDF, Word, or scanned)
- Instructions on whose side the client is acting (buyer, seller, etc.)
- Any background on the commercial deal
- Knowledge of the client's standard positions on key issues
The workflow
Read the contract end to end
Read the entire contract once before drafting any advice. Identify the deal structure, the parties' obligations, and the overall risk profile.
Verify the parties and capacity
Confirm legal names, ABN/ACN, signing authority. Check whether section 127 of the Corporations Act applies and how the contract is being executed.
Check scope and obligations
Verify the scope of services or supply matches the commercial agreement. Identify any vague or open-ended language that could be exploited.
Review payment, IP, and confidentiality
Check payment terms, IP ownership and licensing, confidentiality obligations and duration, and Privacy Act compliance for personal information.
Review liability and indemnity
Identify warranties, indemnities, limitation of liability caps, and consequential loss exclusions. Flag uncapped indemnities and unusual liability allocation.
Check termination and dispute resolution
Identify when each party can terminate, the notice periods, and the consequences. Check the dispute resolution clause and governing law.
Apply ACL compliance check
For consumer or small business standard form contracts, check for unfair contract terms under section 25 of the Australian Consumer Law.
Draft the structured advice memo
Produce a structured memo flagging the risk areas, proposed amendments, and recommended action. Send to the client with edited contract attached.
What you will have at the end
A structured advice memo for the client identifying the key risks, suggested amendments, and recommended next steps. The contract has been marked up with proposed changes ready to send to the counterparty if the client approves.
Common issues
- Missing limitation of liability provisions buried in boilerplate
- Failing to identify uncapped indemnities
- Overlooking change of control clauses
- Not checking ACL compliance for standard form contracts
- Treating boilerplate as unimportant — governing law and dispute resolution matter
Run this workflow on a real matter
Quillio reviews commercial contracts in seconds — walking through this workflow automatically and producing a structured advice memo. See /practice-areas/commercial-lawyers or start a free trial.
This workflow covers standard commercial contracts. Specialist contracts (M&A, financing, technology licensing) may require additional review steps.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
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