Contract Review for Commercial Litigators

Agree the Review Scope

Agree what the client wants the transaction to achieve and what your contract review will cover before assessing individual clauses. Record the parties’ roles, transaction structure, governing jurisdiction and commercial objective. Identify the negotiating position, signing deadline and person authorised to give instructions.

Ask what would make the agreement unacceptable. A supplier might need payment before committing to materials, while a purchaser might need an exit if delivery misses a dependent project. Those instructions change which amendments you pursue first.

Assemble the complete review set, including schedules, incorporated online terms and any documents that take priority over the main agreement. Preserve the version of incorporated terms you reviewed. Ask the client to confirm operational facts, insurance arrangements and promises made during negotiations.

A limited review of a liability cap leaves different questions open from advice on the whole agreement. Record the agreed limits and explain what remains unassessed. If an excluded clause defeats the protection you were asked to review, raise that dependency and obtain instructions about further work.

The Queensland Law Society’s conduct rules require clear, timely advice consistent with the engagement and lawful, proper and competent instructions. This is a Queensland professional-duty reference. Apply the conduct rules governing your own practice and identify the law relevant to the transaction.

Read the Obligations as a Working Arrangement

Map who must perform each obligation, what triggers performance and what the other party must do first. Follow the sequence from commencement through delivery, acceptance and payment. Record the document or event that would establish compliance at each stage.

For a delivery obligation, identify the goods or services, required standard, responsible person and deadline. Then ask whether acceptance needs written confirmation, follows an objective test or happens automatically after an elapsed period. Connect that answer to invoicing and the right to reject defective work.

Hypothetical Acceptance Clause

Assume you act for a purchaser buying bespoke equipment under a proposed supply agreement. Clause 6 gives the purchaser ten business days after delivery to reject equipment that fails the agreed tests. Schedule 2 says acceptance occurs when the carrier obtains a signature at the delivery address.

The purchaser’s instruction is to pay the final instalment only after successful testing. A delivery signature could nevertheless trigger acceptance under the schedule and bring payment forward, depending on the agreement’s priority provisions. A warehouse employee’s receipt is also different evidence from an engineer’s test result.

Propose wording in the existing draft that distinguishes receipt from acceptance and ties acceptance to the agreed test procedure. Check the payment clause and priority provision at the same time. Obtain instructions on the testing period, rejection notice and consequence of a failed test before settling the replacement language.

This example assumes the parties can negotiate those terms. It illustrates a review dependency, without deciding the effect of any particular executed agreement.

Definitions and cross-references need the same treatment. Trace “completion”, “loss” and “services” through the clauses that use them. If the main clause looks narrow but its defined term includes work outside the quoted scope, record the wider obligation in your advice.

Assess Remedies and Risk Allocation

Assess each remedy against the loss the client could actually suffer and the obligations that could produce it. Start with the failure scenario, then read the cap, exclusions and indemnities together. Add the insurance terms and the practical ability to terminate or resolve a dispute.

A liability cap may use fees paid, fees payable or a fixed amount. Identify its calculation period and whether it applies per claim or across all claims. Read exceptions separately and check whether an indemnity or another clause creates exposure outside the cap.

For an exclusion, identify which losses it removes and how the agreement defines them. For an indemnity, ask what event triggers payment, whose conduct is covered and who controls any third-party claim. Compare the proposed exposure with the client’s insurance, including the policy exclusions and contractual-liability position. A contractual insurance requirement alone does not establish cover for every assumed obligation.

Read termination beside cure periods, notice mechanics and the consequences of exit. Check accrued payments, return of property and obligations intended to continue. For dispute provisions, identify escalation steps, forum and any process that could delay a remedy the client needs urgently.

Separate a legal defect from a commercially unattractive bargain. An incorrect cross-reference that leaves the agreed acceptance test unidentified needs correction. A clear requirement to fund materials before receiving payment creates a commercial exposure for the supplier to assess.

Explain that distinction in the recommendation. Give priority to a term that prevents the client achieving its stated objective, even if other clauses appear more aggressive. For each asserted legal defect, identify the governing law and supporting authority before advising on validity or enforceability.

Use a Contract Review Checklist

Track each substantive decision and the instruction needed to close it in the checklist. The following sequence fits an existing commercial agreement and can be adapted to its transaction.

1. Confirm parties and authority. Match legal names to the intended contracting entities and establish who can instruct and sign.
2. Confirm scope and documents. Identify the authoritative draft, missing schedules, incorporated terms and any agreed limits on the review.
3. Test performance obligations. Map deliverables, standards, dependencies and the evidence that proves performance.
4. Trace price and payment. Check calculation methods, acceptance triggers, invoicing, adjustments and disputed amounts.
5. Assess liability and remedies. Read caps, exclusions, indemnities and insurance against the client’s likely exposure.
6. Test duration and exit. Check renewal, termination triggers, cure periods and the financial consequences of ending the arrangement.
7. Review dispute and notice provisions. Identify the forum, escalation process, notice addresses and delivery requirements.
8. Resolve amendments and instructions. Distinguish agreed wording from proposals still awaiting the counterparty’s response or the client’s decision.
9. Verify execution and continuing obligations. Compare the signing version with the agreed draft and assign responsibility for post-signing requirements.

For every material issue, record the source clause and its practical consequence. Add the proposed amendment, your recommendation and the instruction required. A “high risk” label without those details does not tell the client what to decide.

For the hypothetical equipment purchase, the entry could identify clause 6 and schedule 2, then explain the risk of payment before testing. Record the proposed acceptance mechanism and ask the client to approve the test period and failed-test response. Keep the entry open until the wording and instructions agree.

Control Amendments and AI Assistance

Maintain one authoritative draft and a negotiation record that shows which changes are agreed and which remain proposals. Send tracked changes against an identified baseline. When a clean draft arrives, compare it with that baseline before treating it as agreed.

Give each unresolved issue an owner and a status. Retain the counterparty’s response and the client’s instructions against the relevant version. If renumbering changes cross-references, verify them across the entire agreement, including schedules. Replacement wording within an existing agreement needs the same discipline as other legal drafting.

AI-suggested amendments require the responsible lawyer’s assessment of their meaning and effect. The joint guidance on AI in Australian legal practice, issued by the NSW Law Society and the WA and Victorian regulators, requires confidentiality and personal verification. It warns that plausible output can be inaccurate.

Before entering client material into an AI tool, establish how the provider stores and uses it, who can access it and whether the proposed use protects confidentiality. Review contractual terms and the practice’s approved-use controls. Where those protections are unverified, keep confidential material out of the tool.

For a suggested acceptance amendment, read the whole agreement and the client’s instructions yourself. Check that the change preserves the agreed test and works with payment and termination. Read it for unintended obligations. Verify every cited case or statutory proposition in an authoritative source, including whether it supports the claimed point. A fabricated authority cannot justify the amendment.

Record the lawyer’s changes and verification before the proposal goes to the client or counterparty. Broader controls for AI legal document review apply across other document tasks.

Record Advice and Final Approval

Present the unresolved terms in a short advice record with your recommendation and the decision the client must make. Identify the draft version and relevant clauses. Explain the consequence of accepting each unresolved term in the client’s transaction, including any departure from their earlier instructions.

A marked-up agreement alone can hide a decision that requires commercial approval. For the equipment purchase, state whether payment can still fall due before testing and what protection remains if the counterparty rejects the amendment. Ask the authorised client contact to decide whether to negotiate further, accept that exposure or decline to proceed.

Record the advice given and the client’s informed instructions. Identify any condition on approval, such as confirmation of insurance or receipt of a missing schedule. Keep a condition unresolved until the required evidence or instruction is received.

Before signing, compare the execution version with the agreed draft. Confirm that all agreed amendments appear, unresolved proposals have the approved treatment and every incorporated attachment is present. Recheck names, execution blocks and the execution requirements applicable to the entities and jurisdiction.

Handover the signed agreement with an obligations record for the people who will perform it. Assign responsibility for notices, acceptance tests, payment milestones and renewal decisions. In the hypothetical purchase, the handover must identify who records the test result and sends any rejection notice within the agreed period.

Release the signing version only when it matches the approved wording and the recorded conditions on approval have been met. The client then has both the agreement it authorised and a practical record of what must happen next.