The contract they sent you: what to check before signing

When a counterparty sends a draft, most recipients read the price, the quantity and the delivery date, then sign, treating the rest as boilerplate. But disputes rarely arise over price or quantity. They arise over who bears what when something goes wrong — which is exactly what the boilerplate decides.

Reviewing a contract is not a hunt for unlawful clauses; there usually are none. It is a hunt for clauses that put more risk on your side than the deal warrants, and a proposal to rebalance them before signature. That is ordinary commercial practice, not a sign of distrust.

Once signed, any change needs the other side's agreement — and by the time a dispute has arisen, nobody agrees to anything.

Which clauses should you read first?

• The scope of the goods or work, and the standard by which completion is measured. Vagueness here causes more disputes than anything else.
• Payment terms: when, how, and what must happen first — acceptance testing, for example.
• The limitation of liability, which affects the value of the contract more than any other clause and is usually near the end.
• The grounds for termination and what follows: what must be returned or paid.
• Automatic renewal, which binds you for another term if notice is missed.
• Governing law and jurisdiction, for cross-border contracts.

Where does a contract quietly tip against you?

• A liability cap that protects the drafter but not you.
• Delay penalties that run one way only.
• A right for the other side to change the scope without adjusting the price.
• Free assignment of the contract, so your counterparty changes without your knowing.
• A clause giving annexes priority over the contract, where the annexes can be amended unilaterally.
• Wording on whether payment amounts to acceptance — which decides who has to prove what.

What changes when the other side is overseas?

The extra question is where a dispute would be fought. Many contracts specify the counterparty's law and courts, which means litigating abroad at a cost that, in practice, is the same as having no remedy at all.

The usual alternative is arbitration in a neutral seat. An award is enforceable in many countries, which is considerably easier than enforcing a Thai judgment abroad.

What to check beyond the wording

• Whether the signatory can actually bind the other company — check a company certificate issued within six months.
• That the counterparty's name and registration number match the register.
• That every annex referred to has in fact been provided.
• That the seal and signatures meet what that company's articles require.

This page is general information, not advice on your contract. A review always has to take the commercial facts into account. Send us the draft before you sign.