A good contract review checklist covers 15 clauses: parties and term, scope, payment, renewal and termination, liability cap, indemnity, warranties, IP, confidentiality, data protection, service levels, assignment, restrictions, governing law, and amendments. For each one you need to know what good looks like and what a red flag looks like. That is what this guide gives you, along with SaaS and vendor variants and a free template you can copy.
It is written for founders, freelancers, procurement and ops people who sign contracts without a lawyer every time. We also make AI Contract Review, which runs this kind of checklist on a PDF in about a minute. We say where it fits and where you still need a lawyer.
How to use this checklist
- Read the whole contract once without stopping. You need the shape before the details.
- Read the definitions section carefully. A broad definition of "Confidential Information" or "Services" changes every clause that uses it.
- Go through the 15 clauses below in order. Mark each one green (fine), yellow (ask a question) or red (must change or get advice).
- Check the attachments. Order forms, statements of work, schedules and any terms "incorporated by reference" (for example, a link to online terms) are part of the contract.
- Turn your yellows and reds into a short email to the other side, with the change you want for each one.
This is a commercial contract review checklist, not legal advice. It helps you understand what you are signing and spot what to push back on. Our separate guide on how to review a contract with AI shows how to speed up each step.
The 15 clauses
Here are the key clauses in a contract, with the one-line version in the table and more detail below.
| Clause | What to check | Red flag | Severity |
|---|---|---|---|
| 1. Parties and term | Correct legal names, start date, length | Wrong entity; term starts before signature | Medium |
| 2. Scope and deliverables | What exactly is provided, by when | Vague scope; "and other services as required" | High |
| 3. Payment | Price, invoicing, due dates, late fees, price increases | Unilateral price changes; fees due before delivery | High |
| 4. Renewal and termination | Auto-renewal, notice period, termination for convenience | Auto-renewal with 60 to 90 days' notice; no exit without cause | High |
| 5. Liability cap | Maximum each side pays if things go wrong | Your liability uncapped while theirs is capped | High |
| 6. Indemnity | Who covers third-party claims | One-way indemnity from you; covers "any claim" | High |
| 7. Warranties | What each side promises about quality | All warranties disclaimed by the seller | Medium |
| 8. Intellectual property | Who owns the work, the tools, the data | Paid-for work owned by the vendor; broad license to your content | High |
| 9. Confidentiality | What is confidential, for how long, exceptions | One-way; no standard exclusions; endless term | Medium |
| 10. Data protection | Personal data handling, security, breach notice | No data terms when personal data is shared | High |
| 11. Service levels (SLAs) | Uptime, response times, remedies | Targets with no credits or exit right | Medium |
| 12. Assignment | Can either side transfer the contract | They can assign freely; you cannot | Low |
| 13. Restrictions | Exclusivity, non-compete, non-solicit | Broad non-compete or exclusivity hidden in boilerplate | High |
| 14. Governing law and disputes | Which state's law, which courts or arbitration | Far-away venue; mandatory arbitration with costs on you | Medium |
| 15. Amendments and entire agreement | How terms can change; what documents count | Vendor can change terms by updating a web page | Medium |
1. Parties and term
Check the exact legal names (your LLC, not you personally, if that is what you intend), addresses and the effective date. Make sure the term is clear: a fixed period, until the work is done, or rolling. If you sign personally for a business deal, you may be personally liable.
2. Scope and deliverables
Most disputes start here. Good scope says what is delivered, in what format, by when, and what counts as done (acceptance). Red flags: "including but not limited to" in the list of your obligations, or open-ended revisions with no limit.
3. Payment
Check the price, what it includes, invoicing schedule, payment terms (for example, net 30), late fees, and expenses. Watch for price increases at renewal "at the vendor's discretion" and minimum commitments you cannot reduce.
4. Renewal and termination
Auto-renewal is normal; long notice periods are the trap. A one-year contract that renews automatically unless you cancel 90 days before the end means you have to act in month nine. Look for a right to terminate for convenience with reasonable notice, and what you owe if you leave early.
5. Liability cap
A liability cap limits how much one side pays if things go wrong. A common pattern is a cap equal to fees paid over the previous 12 months, with exclusions for things like confidentiality breaches. Good looks like a mutual cap. A red flag is a cap that protects only the other side, or no cap on your side at all.
6. Indemnity
An indemnity means one side covers the other's costs if a third party sues. Mutual, narrow indemnities (for example, the vendor covers IP infringement claims about its own product) are normal. A one-way indemnity from you covering "any and all claims arising from this agreement" is a serious risk, especially if it sits outside the liability cap.
7. Warranties
Warranties are promises about quality: the service will work as described, the work is original, you have the right to sign. Sellers often disclaim everything else, which is normal, but they should still warrant the basics of what you are paying for.
8. Intellectual property
If you pay for custom work, you usually want to own it, or at least have a broad license to use it. The vendor keeps its own pre-existing tools. Watch for clauses that let the vendor use your content or data for any purpose, including training its own systems.
9. Confidentiality
Check what counts as confidential, how long the obligation lasts, and the standard exclusions (information already public, already known, independently developed, or required by law). Both sides should be covered if both share information.
10. Data protection
If personal data about your customers or staff will be shared, the contract should say how it is protected, where it is stored, who the subprocessors are, and how fast you will hear about a breach. Many vendors use a separate data processing agreement; ask for it.
11. Service levels (SLAs)
An SLA sets uptime or response targets. It only matters if there is a remedy: service credits, and a right to terminate after repeated misses. Check how uptime is measured and what is excluded, such as scheduled maintenance.
12. Assignment and change of control
Can the other side hand the contract to another company, for example after an acquisition? Can you, if you sell your business? One-sided assignment rights are low risk most of the time, but they matter if you plan to sell.
13. Restrictions: exclusivity, non-compete, non-solicit
These limit what your business can do: work only with this vendor, not serve certain clients, not hire their staff. They are sometimes buried in the general terms. Any restriction on your ability to work should be narrow, time-limited and clearly justified.
14. Governing law and disputes
This says which state's law applies and where disputes are heard. A venue across the country makes even a small dispute expensive. Mandatory arbitration is common; check who pays its costs.
15. Amendments and entire agreement
Changes should require a written agreement signed by both sides. A red flag is a clause that lets the vendor change the terms by posting a new version online. The entire agreement clause means promises made in emails or sales calls do not count unless they are in the contract.
Red flags that mean 'call a lawyer'
- Unlimited liability or a one-way indemnity from you.
- A personal guarantee, or you are signing as an individual for a business deal.
- Non-compete, exclusivity or non-solicit terms that limit your future work.
- Long commitments: multi-year terms, large minimum spends, or heavy early termination fees.
- Transfer of IP you will need to keep running your business.
- Regulated data (health, financial, children's data) or cross-border data transfers.
- Anything you do not understand after two reads.
SaaS contract review checklist
For a SaaS contract review checklist, add these to the 15 clauses:
- Subscription details: number of seats or usage limits, and what happens if you go over.
- Price protection: a cap on price increases at renewal.
- Data ownership and export: your data is yours, and you can export it in a usable format when you leave.
- Data deletion: how long after termination your data is deleted.
- Uptime SLA and support hours, with service credits.
- Security: certifications or audits the vendor maintains, and breach notification timing.
- AI and training: whether the vendor can use your data to train its models.
- Online terms: whether the vendor can change its terms of service during your subscription.
Vendor contract review checklist
For suppliers, contractors and service providers, a vendor contract review checklist adds:
- Acceptance: how and when you approve deliverables before paying.
- Insurance: the vendor carries appropriate liability insurance.
- Subcontracting: whether the vendor can pass work to others, and remains responsible if it does.
- Independent contractor status: clear for contractors, so there is no employment confusion.
- Delivery and delays: what happens if deadlines slip, including a right to terminate.
- Compliance: the vendor follows applicable laws and your policies where relevant.
Contract risk assessment: scoring what you found
Once you have marked each clause, a simple contract risk assessment helps you decide what to do next:
- Score each clause: 0 for green, 1 for yellow, 3 for red.
- Weight by deal size: multiply the total by 2 if the contract is worth more than you could comfortably lose, or lasts longer than a year.
- Decide: a low score means sign after sending your questions. A medium score means negotiate the reds before signing. A high score, or any single item from the "call a lawyer" list, means get legal advice.
The exact thresholds matter less than doing it the same way each time. Consistency is what turns a gut feeling into a decision you can explain to a partner or investor.
Running the checklist with AI
You can run this checklist by hand in 30 to 60 minutes for a typical agreement. AI can do the first pass in about a minute. AI Contract Review reads a PDF or Word file and returns:
- A summary card: parties, amount, term, auto-renewal and termination.
- Risky clauses with the exact quote and a plain-English explanation.
- A list of changes to ask the other side for.
- The renewal date in a contract register, with a reminder 30 days before it renews.
It is an assistant, not legal advice. It helps you read faster and know what to ask. Always check its findings against the actual clause, and take high-value or unusual contracts to a lawyer.
The summary card is free for 3 contracts a month at contracts.kissmyskills.com, no sign-in needed. Unlimited contracts and the full risk review through your own Claude come with the KissMySkills All-Access subscription at $15 a month or $129 a year.
Where a lawyer or a CLM wins
A checklist, and an AI that runs it, will not give you negotiation strategy, knowledge of your state's specific rules, or judgment on a high-value deal. A lawyer wins there. And if you sign hundreds of contracts a year, contract lifecycle management (CLM) software wins on tracking obligations, approvals and renewals after signing. For when AI is enough and when it is not, see can AI replace a lawyer for small business contracts.
Free contract review checklist template
Copy this contract review checklist template into a doc and fill it in for each agreement. Mark each line G, Y or R and add a note.
- Parties: correct legal names and entity? Signing as the company, not personally?
- Term: start date, length and end date clear?
- Scope: deliverables, deadlines and acceptance defined?
- Payment: price, schedule, late fees and price increases acceptable?
- Renewal: auto-renewal? Notice period? Date added to calendar?
- Termination: can we exit for convenience? Cost of leaving early?
- Liability cap: mutual and reasonable? What is excluded?
- Indemnity: mutual and narrow? Inside or outside the cap?
- Warranties: does the seller stand behind the basics?
- IP: who owns the work and the data? Any broad license to our content?
- Confidentiality: mutual, standard exclusions, sensible duration?
- Data protection: data processing terms in place if personal data is shared?
- SLAs: targets with credits and an exit right?
- Assignment: can they transfer the contract without our consent?
- Restrictions: any exclusivity, non-compete or non-solicit?
- Governing law and disputes: acceptable state and venue?
- Amendments: changes only in writing signed by both sides?
- Attachments: all order forms, schedules and linked terms read?
- Overall: green to sign, yellow to negotiate, red to call a lawyer.
If you are on the other side and writing the contract, our guide on how to write a freelance contract uses the same clauses.
Short on time? Upload a PDF and get this checklist filled in automatically with AI Contract Review. The first 3 contracts each month are free.
FAQ
How do you review a contract?
Read it once end to end without stopping, then go clause by clause with a checklist: parties and term, scope, payment, renewal and termination, liability cap, indemnity, warranties, IP, confidentiality, data protection, service levels, assignment, restrictions, governing law and amendments. Mark each item green, yellow or red, ask for changes on the reds, and send anything high-value or unusual to a lawyer.
What should you look for in a contract?
Look for what you must do and pay, how long you are locked in, how you can get out, what happens if something goes wrong (liability cap and indemnities), who owns the work and the data, and any restrictions on your business such as exclusivity or non-solicits. Auto-renewal with a long notice period and uncapped liability are the two most common traps.
How do you read a contract?
Start with the definitions, because they change the meaning of everything else. Then read the main obligations, the money, the term and termination, and the risk clauses. Keep a list of anything you do not understand. Pay attention to words like shall, may, sole discretion and including without limitation, and check any schedules or documents the contract refers to.
How do you review a contract agreement as a non-lawyer?
Use a checklist so you do not skip anything, compare each clause with what good looks like, and write your questions down. An AI contract review tool can run the same checklist on a PDF in a minute and give you the risky clauses with quotes. It is not legal advice, so for high-value, long-term or unusual agreements, ask a lawyer to check the result.
