Start with the parts that actually bite
You don’t have to read a contract front to back on the first pass. Go straight to the clauses that change what it costs you or what you’re locked into:
- Who the parties are, and whether the entity you’re dealing with is the one you expected — a company name you don’t recognise rather than the brand you thought.
- The money — the price, what’s included, when it’s due, and any fees, interest or increases tucked into a schedule or annexure.
- The term — how long you’re committed for, and whether it renews automatically unless you cancel.
- How it ends — what you must do to get out, how much notice you owe, and any break fee or penalty.
- What each side has to do, and what happens if they don’t.
The clauses people skim and later regret
The expensive surprises are rarely hidden — they’re just boring, so people skip them. These are the ones worth slowing down for:
- Automatic renewal — the contract rolls over for another term unless you cancel inside a narrow window.
- Unilateral variation — the other side can change the terms, fees or scope on notice, and you’re bound by the new version.
- Indemnities — you agree to cover the other side’s losses, sometimes for things outside your control.
- Limitation or exclusion of liability — they cap what they owe you if things go wrong, often to a token amount.
- Restraint of trade or non-compete — common in employment and business-sale contracts, and easy to underestimate.
- Dispute resolution and governing law — which state’s or country’s courts you’d have to fight in, and whether you’re forced into arbitration.
Red flags worth stopping on
- Blanks, “TBC”, or amounts and dates left to be “agreed later” — you’re signing an open cheque on those terms.
- Vague standards like “reasonable”, “from time to time” or “at our discretion”, which almost always favour the party who wrote it.
- Cross-references to documents you haven’t seen — policies, schedules, “the rules” — that are still binding on you.
- Terms that only run one way, where every obligation and penalty sits on your side and none on theirs.
- A defined term (a capitalised word) that means something narrower or broader than it sounds — always check the definitions.
A repeatable way to read any contract
Once you’ve done a few, the same five steps work on almost anything:
- Read the definitions first — capitalised words mean exactly what the contract says they mean, not what you assume.
- Map the obligations both ways: what you must do, and what they must do.
- Find the exit — how each side can end it, and what that costs.
- Ask “what happens if things go wrong” — late payment, a breach, a dispute, an injury — and see who carries the risk.
- Write down anything you don’t understand or that feels one-sided. That list is exactly what to raise before signing, or to take to a professional.
When you need a legal contract review, not just a read
A careful read is enough for a lot of everyday agreements. But some contracts carry enough money or risk that a legal contract review — a licensed lawyer reading it for your specific situation — is worth every dollar:
- Anything tied to property — a contract of sale, a Section 32, a commercial lease — where a mistake is measured in tens of thousands.
- Employment contracts with restraint-of-trade, equity, bonus or IP clauses you can’t easily walk back.
- Business deals — buying or selling a business, shareholder agreements, large supplier contracts.
- Anything you can’t undo, where the downside is large, or where the other side clearly had a lawyer and you didn’t.
Where a free first read fits
A DIY read tells you what a contract says; a lawyer tells you what it means for you and what to change. ReadMyContract sits in between: upload the document and, in a couple of minutes, you get a plain-English summary, the key terms pulled out, and red flags ranked by how much they matter — for free, with the document kept private. It’s a sharper first pass than reading it cold, and it tells you when something genuinely needs a lawyer, so you spend on a legal review where it actually counts — not on the contracts that are standard.