1. What Should Businesses Check before Signing a Contract?
Before signing, confirm who can bind each company, what must be delivered, and when payment becomes due. Contract type matters because service and goods transactions may follow different rules. Clear terms give both sides a workable standard for performance.
Confirm Authority and Contract Type
Identify the actual contracting entities and authorized signers. Distinguish services from goods, including mixed transactions, before applying standard terms.
- Match entity names to invoices and signature blocks.
- Define deliverables, acceptance standards, and deadlines.
- Check whether New York UCC Article 2 governs the sale of goods.
General Obligations Law §5-701 requires subscribed writings for specified agreements; UCC §2-201 sets separate sale-of-goods rules and exceptions.
Make Performance and Payment Measurable
A missed delivery often turns into a payment dispute when acceptance criteria are vague. Tie invoices to deliverables and specify how objections must be raised.
- Set prices, payment dates, and approval procedures.
- Address late delivery, disputed invoices, and acceptance.
- Match purchase orders to the master agreement.
For recurring purchases, review the allocation of obligations in supply agreements.
2. Which Contract Clauses Carry the Greatest Risk?
A favorable price can lose its value if one clause transfers unexpected losses. Liability caps, indemnities, warranties, and termination provisions must work together. Review exceptions before accepting a cap.
Compare Liability and Indemnity Terms
A damages cap and an indemnity obligation serve different purposes. Exclusions may leave significant claims outside an agreed cap, subject to applicable law.
| Clause | Question before Signing |
|---|---|
| Liability cap | Which claims fall outside the limit? |
| Indemnification | Which losses trigger payment or defense duties? |
| Warranty | What remedy follows nonconforming performance? |
| Force majeure | Which disruptions excuse or delay performance? |
Liability cap
- Question before SigningWhich claims fall outside the limit?
Indemnification
- Question before SigningWhich losses trigger payment or defense duties?
Warranty
- Question before SigningWhat remedy follows nonconforming performance?
Force majeure
- Question before SigningWhich disruptions excuse or delay performance?
Compare defense costs and exclusions when reviewing indemnification claims.
Check Termination Rights and Survival
An exit clause should explain when either side can end the deal and what duties remain. A claimed breach may still require notice under the agreement.
- Separate termination for cause from convenience.
- Specify required notice and any opportunity to cure.
- Identify surviving payment, confidentiality, and dispute duties.
Review the conditions for contract termination before treating a deadline as an exit right.
3. How Should Changes and Notices Be Documented?
A team may change a deadline by email while the signed contract still shows the original date. Identify who may approve revisions and what form a change must take. Separate routine project messages from formal notices.
Control Amendments and Vendor Instructions
Keep one record of the agreed scope rather than relying on scattered conversations. Check the amendment clause and the authority of anyone approving a change.
- Use dated change orders for revised price or scope.
- Track approvals by the designated company representatives.
- Resolve conflicts between purchase orders and master terms.
Retain prior versions so the business can identify which obligations applied when performance changed.
Preserve Notices and Performance Records
A notice clause may require a specific address, delivery method, or recipient. Operational messages do not necessarily satisfy those contractual conditions.
- Record missed milestones and disputed deliverables promptly.
- Keep delivery confirmations for notices and cure demands.
- Preserve invoices, acceptance records, and written responses.
These records can clarify whether the parties complied with their own procedures.
4. Where Can a Business Contract Dispute Be Resolved?
Review governing law, forum selection, and arbitration as separate choices. State law usually determines contract rights, while a covered arbitration agreement may implicate the Federal Arbitration Act. The selected forum also affects filing procedures.
Distinguish Courts from Arbitration
A forum clause cannot create subject-matter jurisdiction. New York County Supreme Court may hear qualifying disputes; venue and jurisdiction require separate review.
- Check the chosen court and any arbitration commitment.
- Review Commercial Division eligibility and case type.
- Check NYSCEF procedures and the RJI plus Commercial Division Addendum.
The Commercial Division generally has a $500,000 threshold in New York County, excluding interest and fees, with exceptions. Apply for assignment using an RJI and Addendum generally within 90 days after complaint service. Review arbitration separately if agreed.
Check Deadlines before Choosing a Remedy
Waiting while negotiations continue can leave a claim out of time. Different statutes govern ordinary contract claims and sales-of-goods disputes.
- CPLR §213(2) generally sets six years for ordinary contract claims.
- UCC §2-725 generally sets four years for sales-of-goods claims; the original contract may shorten this to at least one year.
- Check accrual, contractual notice, and any applicable exceptions.
Settlement talks alone do not necessarily suspend a filing deadline.
5. Frequently Asked Questions
Can an owner be personally liable for a company contract?
Possibly, if the owner gives an enforceable personal guarantee or another legal basis supports liability. Company status alone does not decide the issue.
Can an email exchange create a binding contract?
Possibly. The wording, intent to be bound, and applicable signature requirements matter. An unsigned formal agreement is not the only evidence courts may consider.
Can a business recover attorney fees after winning?
Not automatically. A contractual fee provision or applicable statute generally must authorize recovery.
Do NYC government contracts follow the same process?
No. City procurement contracts may involve separate solicitation, approval, and vendor procedures that do not govern ordinary private agreements.
6. Review Commercial Contract Risks with SJKP
A payment dispute often begins with language accepted months earlier. SJKP's attorneys can assess payment terms, proposed changes, and dispute provisions against the transaction records. Contact SJKP to discuss a contract before signing or renewing it.
15 Jan, 2026
