Lesson 1: Review checklist for a commercial contract

Before you start reviewing, check whether the target company is supplying (customer) or buying goods and/or services (supplier).

This checklist provides a checklist of the key legal and commercial aspects of a customer contract where the target company is supplying goods and/or services to a customer.

1. Overview and agreement details

   • Identify the parties involved (and their relationship, if any)

   • Specify the nature of the agreement (customer and/or supply contract)

2. Commercial details

   • Indicates whether there is a minimum contractual quantity the Customer agreed to purchase

   • Approximate annual contract value or pricing (revenue)

   • Clarifies whether the target Company is the exclusive supplier or not

3. Term and termination rights

   • Outlines the initial term of the contract

   • Identifies an option to extend the term for an additional term

   • Notes whether the Customer has the right to terminate the contract early

4. Transfer restrictions

   • Identify any transfer restrictions or assignment restrictions or restrictions on a change of control of the target company

5. Liability regime

   • Whether the target company indemnifies the other party and in what circumstances

   • Whether the target company’s liability is limited and if there are any exclusions from this limit (where the liability is unlimited)

   • Whether the target company is liable for consequential loss

6. Security

   • Whether the target company is required to provide security

7. Miscellaneous

   • Identify the governing law

   • Any other onerous or unusual provisions identified