A new client said yes (yay!), a brand deal landed in your inbox, or a vendor finally sent over the agreement you’ve been waiting on. Now the only thing between you and getting started is a contract, usually in the form of 8+ pages of language that you understand 10% of. And 90% you don’t.
So you skin it, you check the price, dates, a few details, and hit “sign.” But the parts you tend to skim end up being the parts that matter most when something goes wrong. Things like:
- Who can walk away (and when and why)
- Who owns the work (and even how it can be used)
- How much you’re on the hook for (or could potentially lose)
Before you end up signing an agreement that can lead you stranded mid-project, here’s what to do before signing a contract:
Before we get into it: the contract IS the agreement. Not what was said during the discovery call, or the “oh, we’d never actually enforce that” email. If a promise isn’t written into the contract, you should assume it doesn’t exist. This is especially true if the contract has an ‘entire agreement’ or ‘integration’ clause (most do) — it’s exactly the language that makes outside promises unenforceable, so don’t assume a verbal side-promise survives just because it was never contradicted in writing.
Your Contract Checklist: What to Do Before Signing a Contract
The first (unofficial) to-do on your checklist is to resist signing immediately. It’s tempting and sometimes you feel the pressure to “get it done,” but hold off until you can get a good look at it. If you need to take the pressure off, hit reply and let the contractor or business owner know that you’ll be reviewing the contract and will get back to them tomorrow or by X day or date.
Now you’re set to review your contract, here’s what to look for and what to do:
#1. Check The Services Defined Within The Contract (and the Timeline)
You’re looking to make sure the services you’ve talked about with the contractor are clearly mentioned within the contract and the timeline has been defined. That includes calls, emails – what’s being delivered, how much of it, by when – should be written into the contract itself (usually in a “Scope of Work” or “Services” section, or an attached proposal).
Vague is the enemy here. “Social Media Management” could mean three posts a week or daily content, community management, and monthly reports. Look for specifics: the exact deliverables, how many of each, how many rounds of revisions are included, and what’s NOT included.
Then check when work starts, the deadlines or milestones along the way, and when the project is considered complete. The best contracts will also spell out what happens if one side holds things up – like a client taking three weeks to send feedback – so a delay on their end doesn’t turn into a missed deadline on yours.
#2. Check Who Can Terminate the Contract – and How
The termination clause tells you how either side can end the agreement early. First, check whether you BOTH have the right to terminate, or only the other party does.
Then check the details: Can someone end it “for convenience” (for any reason at all), or only “for cause” (like a breach)? How much notice is required? Is there a window to fix a problem before the other side can walk away?
And don’t stop at how it ends – look at what happens after. Do you get paid for work you’ve already done? Is your deposit refundable? Are there fees for ending early?
#3. Look for Auto-Renewal (and How to Cancel)
A lot of contracts, especially software, memberships, and ongoing service agreements, renew automatically unless you cancel within a specific window, often 30 to 60 days before the renewal date. Miss it, and you’re signed (and paying) for another full term.
Check whether the contract auto-renews, how long each renewal lasts, and exactly HOW you have to cancel. Some contracts require written notice sent a specific way, and a quick DM or email might not count. The day you sign, put the cancellation deadline on your calendar.
Some states also require the business to give you specific notice before an auto-renewal kicks in — so a missed cancellation window doesn’t always mean you’re automatically stuck.
#4. Fine the Non-Compete and Exclusivity Clauses
A non-compete limits your ability to work with competitors or offer similar services, usually for a set period of time and sometimes within a certain area. Exclusivity clauses are close cousins – they say you can only work with this company in a certain category. These show up constantly in brand deals (like agreeing not to promote any other skincare brand for 90 days).
Neither one is automatically a dealbreaker, but both limit how you can earn money – so they should be reasonable, clearly defined, and reflected in what you’re being paid. Look at how long they last, what industries or products they cover, and whether they apply after the contract ends.
Whether a non-compete is enforceable varies a lot from state to state, but don’t sign one assuming it won’t hold up – fighting it late costs time and money either way.
#5. Read the IP Section: Who Owns What’s Created?
Whether you’re hiring a copywriter or signing an agreement to be a contractor for an agency, please read the intellectual property (IP) section to see who actually owns the work and what you (or they) can do with it once it’s created.
Look for whether you’re transferring ownership outright (an ‘assignment’) or whether the contract calls it ‘work made for hire’ — these aren’t always interchangeable. Work-for-hire status only applies automatically to employees, or to contractors in specific categories of work with a signed agreement saying so; otherwise, an assignment clause is what actually transfers ownership. Or, you may be granting a license instead, where you keep ownership and give the other party permission to use the work in specific ways.
Check the details: Does ownership transfer only after you’ve been paid in full? Are your pre-existing materials – your templates, frameworks, and processes you use with every client – carved out so you don’t accidentally sign them away? Can you still share the work in your portfolio?
#6. Find the Liability Cap (or Lack of One)
A limitation of liability clause caps how much one party can owe the other if something goes wrong. It’s often tied to what was paid under the contract – for example, “liability is limited to the fees paid in the last 12 months.” If there’s no cap at all, what you could owe isn’t limited to what you were paid.
Check whether the cap protects both sides or only the other party, and read the indemnification clause right next to it (that’s the part saying who covers whose legal costs if a third party sues). A one-sided cap paired with a broad indemnification promise from you is a red flag worth bringing up before you sign.
#7. Check the Governing Law
The governing law clause decides which state’s laws are used to interpret the contract. It’s usually paired with a venue or jurisdiction clause that says where a dispute would be handled – and sometimes a requirement to go to mediation or arbitration before (or instead of) court.
If you’re in Ohio and the contract says disputes are handled in California, you could end up hiring a lawyer or traveling across the country to deal with a problem. Ideally, it’s your home state, or at least somewhere you could realistically travel to.
#8. Make Sure Your Business is the One Signing (Not You Personally)
If you’ve set up an LLC or corporation, your business should be the party to the contract – not you as an individual. That means the contract lists your business’s full legal name exactly as it’s registered with the state (think “Bright Studio LLC,” not just “Jane Doe” or your brand nickname).
The same goes for your signature. Sign as a representative of your business, with your name, your title, and the business name – for example, “Jane Doe, Owner, on behalf of Bright Studio LLC.” If you sign as yourself, you could be personally responsible for what’s in that contract, which undercuts the whole reason you formed an LLC in the first place.
While you’re here, look for any “personal guarantee” language. It does the same thing on purpose – it makes you personally responsible if your business can’t hold up its end.
Can You Ask for Changes to a Contract Sent to You?
Yes! A contract someone sends you is a starting point, not a final offer. You can redline it (suggest edits directly in the document), ask to remove clauses that don’t apply, or ask to add protections that are missing.
The other side may not agree to everything, and that’s fine – the goal is to understand what you’re signing and negotiate the parts that matter most to you. Usually, that’s the scope of work, termination, IP ownership, and liability.
Whatever you agree on, just make sure it ends up IN the final signed contract.
Ready to Sign Your Next Contract with Confidence?
Knowing what to do before signing a contract puts you miles ahead of most small business owners – you know where to look, what to question, and when to slow down and review. But reading a contract and knowing exactly what it means for your business aren’t necessarily the same thing.
Every contract and situation is different, and how a clause plays out depends on your specific facts. So if you’ve got a contract sitting in your inbox and something feels off (or you just want a second set of eyes before you sign, that’s exactly what a contract review is for – and why contract review is included in the Fractional General Counsel Membership, a month-to-month legal retainer for founders.
