Patrick Lim
Partner at Raj, Ong & Yudistra

In our previous parts of this volume of articles, we explored the details of step 1 and step 2 of the general process of carrying out a legal contract audit.

The next step is the meat of the process, reviewing the documents. In this regard, we will take a look at the main points for this step:

Read the contract carefully

The first step in reviewing a contract is to read it carefully, paying attention to all the provisions and terms. It’s important to take notes and highlight any key provisions or terms that you want to discuss or address later.

Understand the context

As you read the contract, it’s important to understand the context in which it was created. This includes considering the parties involved, the purpose of the contract, and the industry or sector in which it will be used.

Identify key provisions

As you read the contract, it’s important to identify the key provisions that will have the greatest impact on your business. These may include provisions related to performance standards, compensation, indemnification, and dispute resolution.

Evaluate the provisions

Once you have identified the key provisions of the contract, the next step is to evaluate them to determine whether they are fair, reasonable, and consistent with your business objectives and legal and regulatory obligations.

Take notes and make a list of concerns

As you review the contract, it’s important to take notes and make a list of any concerns or issues that you identify. This will help you to keep track of your thoughts and to address the issues later on in the process.

Overall, step 3 in the process of conducting a legal contract audit involves reading the contract carefully, understanding the context in which it was created, identifying key provisions, evaluating the provisions, and taking notes and making a list of concerns.

In our next article we will be exploring step 4, which is identifying the issues or opportunities arising from the review of the documents.