Commercial contracts are part of everyday business. They govern relationships with suppliers, clients, landlords, service providers, partners and many others.
A signature can also create obligations that last for months or years. New York recognizes electronic signatures as having the same validity and effect as handwritten signatures in many circumstances, so clicking “sign” deserves the same care as signing a paper agreement.
At Braverman Law Firm we often remind business owners that before entering a commercial contract, they should understand exactly what they are agreeing to. Here are eight areas worth checking.
1. Make Sure the Parties Are Correctly Identified
Start with something simple: who is actually entering the agreement?
The contract should use the correct legal name of your company and accurately identify the other party. Check whether you are signing on behalf of a corporation, LLC or another business entity.
Pay particular attention to any language that could create personal liability. A personal guarantee, for example, may make an owner personally responsible for certain business obligations.
2. Check the Scope of Work
A commercial agreement should make each party’s responsibilities clear.
For a service agreement, this may include the services being provided, deliverables, deadlines and standards that must be met. A supply agreement might address quantities, delivery schedules and product requirements.
Vague language can leave both sides with different expectations. If a particular deliverable or deadline is important to the deal, make sure it appears in the written agreement.
3. Understand the Payment Terms
Check how much must be paid, when payment is due and what happens if a payment is late.
Depending on the agreement, you may also need to consider deposits, recurring fees, expenses, price increases and interest on overdue amounts.
Look beyond the headline price. A contract that initially appears affordable could become considerably more expensive once additional charges or automatic price adjustments are included.
4. Know How Long the Contract Lasts
Check the start date and initial term of the agreement.
Some commercial contracts end automatically on a particular date. Others renew unless one party gives notice within a specified period.
Automatic renewal clauses deserve particular attention. Missing a notice deadline could leave your business committed for another term.
Add important renewal and termination dates to your business calendar once the agreement is signed.
5. Read the Termination Provisions
Business relationships do not always develop as expected.
Before signing, understand when you can leave the agreement and what doing so could cost.
Can either party terminate without giving a reason? How much notice is required? Does the other party need to breach the contract before you can terminate? Is there an early termination fee?
The agreement should also explain what happens after termination, including outstanding payments, confidential information and any obligations that continue after the relationship ends.
6. Review Liability and Indemnification Clauses
Liability provisions can shift significant financial risk between the parties.
A limitation of liability clause may restrict the types or amount of damages one party can recover. An indemnification clause can require one party to cover certain losses, claims or legal costs incurred by another.
These clauses can have serious consequences if a dispute occurs. Their wording and enforceability can also depend on the circumstances and applicable law.
For higher-value or strategically important agreements, businesses may benefit from using New York General Counsel Services to review these provisions and identify potential risks before signing.
7. Check Which Law and Courts Apply
Commercial contracts often contain governing law and dispute resolution provisions.
These terms can determine which state’s law applies and where a dispute must be heard. New York’s Commercial Division even publishes sample provisions that parties can use when choosing New York law or agreeing to jurisdiction in New York courts.
This becomes particularly important when the parties operate in different states.
Also check whether the agreement requires arbitration or another dispute resolution process. These provisions can affect how future disagreements are handled and where proceedings take place.
8. Protect Confidential Information and Intellectual Property
Many commercial relationships involve access to sensitive information.
The contract should explain how confidential information can be used, who can access it and what happens to that information after the agreement ends.
Intellectual property deserves similar attention.
If your business is paying someone to create software, designs, written content, branding or another asset, check who will own the finished work. The same applies when your business provides intellectual property for another company to use.
Do not assume payment automatically answers every ownership question. Put the intended arrangement in writing.
Review the Agreement Before You Sign
A commercial contract can shape a business relationship long after negotiations have finished.
Check the parties, obligations, payment terms, duration, termination rights and risk provisions carefully. A little extra scrutiny before signing can help prevent expensive misunderstandings later.
FAQs About Commercial Contracts
Should a lawyer review every commercial contract?
Legal review may be particularly useful for high-value, long-term or complex agreements and contracts that expose the business to significant liability. Routine agreements may also benefit from standardized templates that have previously been reviewed by counsel.
Can I negotiate a commercial contract?
Often, yes. A proposed contract does not necessarily have to be accepted exactly as presented. Businesses may negotiate terms including pricing, liability, termination rights, renewal periods and payment schedules before signing.
Are electronic commercial contracts legally binding in New York?
Electronic signatures generally have the same validity and effect as handwritten signatures under New York’s Electronic Signatures and Records Act, although particular transactions can have additional legal requirements.
What should I do if I don’t understand a contract clause?
Ask for clarification before signing. If the provision affects liability, payment, intellectual property, termination or another important business issue, consider obtaining legal advice so you understand the potential consequences.
Buy Me A Coffee
The Havok Journal seeks to serve as a voice of the Veteran and First Responder communities through a focus on current affairs and articles of interest to the public in general, and the veteran community in particular. We strive to offer timely, current, and informative content, with the occasional piece focused on entertainment. We are continually expanding and striving to improve the readers’ experience.
© 2026 The Havok Journal
The Havok Journal welcomes re-posting of our original content as long as it is done in compliance with our Terms of Use.
