As a business owner, every contract you sign can help protect your company—or create expensive problems later. This Business Contract Checklist is designed to help Colorado business owners spot gaps, reduce risk, and know when it’s time to have an attorney review an agreement.

Whether you’re hiring a contractor, bringing on a partner, or signing a vendor agreement, this guide will walk you through the key sections every business contract should address.

1. Confirm the Basics of the Contract

Before you dive into the details, make sure the foundation of the contract is accurate and complete:

• Full legal names of all parties

• Business names and entity types (LLC, Corporation, etc.)

• Addresses and contact information

• Effective date of the agreement

• Clear title or description of the agreement (e.g., “Service Agreement,” “Independent Contractor Agreement”)

If the parties are not correctly identified, enforcing the contract can become difficult.

2. Clearly Describe the Purpose and Scope of Work

Your contract should clearly answer: What exactly is being done or provided?

• Detailed description of services or products

• Deliverables and milestones

• Start date and end date (if applicable)

• Timeline, deadlines, or project phases

• Performance standards or quality expectations

The more specific the scope of work, the less room there is for disagreement later.

3. Review the Payment Terms

Payment is often the first point of conflict in business relationships. Make sure the contract clearly explains:

• Total price or fee structure

• Payment schedule (e.g., upfront, monthly, at milestones)

• Deposit or retainer requirements

• Late payment fees or interest

• Refund or cancellation policies

• Accepted payment methods

If payment terms are vague or missing, ask for clarification or consider revising the contract.

4. Understand Responsibilities of Each Party

Each party should know exactly what they are responsible for:

• Responsibilities of your business

• Responsibilities of the other party

• Required cooperation, information, or approvals

• Who provides materials, equipment, or access

• Who manages subcontractors or third parties

If something goes wrong, this section helps determine who is accountable.

5. Clarify Ownership and Intellectual Property Rights

In many modern businesses, intellectual property (IP) is just as valuable as physical property. Make sure the contract addresses:

• Who owns the work product or deliverables

• Whether your business receives a license or full ownership

• Restrictions on how the work can be used

• Rights to logos, branding, software, written content, or designs

If you’re paying for something to be created, you want to be sure you understand what you actually own.

6. Protect Confidential Information

If sensitive business information may be shared, the contract should include confidentiality protections:

• Definition of what is considered confidential

• How confidential information must be handled

• How long confidentiality obligations last

• What happens if confidential information is disclosed improperly

This is especially important when dealing with trade secrets, customer lists, pricing, or proprietary processes.

7. Review the Term and Termination Provisions

No business relationship is guaranteed to last forever. Your contract should explain:

• How long the agreement lasts (the “term”)

• When and how either party can terminate

• Required notice periods (e.g., 30 days written notice)

• Termination for cause (breach, nonpayment, etc.)

• Duties that continue after termination (like confidentiality or final payment)

Clear exit terms help you avoid being trapped in a bad agreement.

8. Check Warranties, Liability, and Risk Allocation

These sections explain who bears the risk if something goes wrong:

• Any warranties or guarantees provided

• Limitations of liability (how much each party can be held responsible for)

• Indemnification provisions (who covers what if a third party sues)

• Disclaimers of certain damages

These clauses can significantly impact your financial exposure, so it’s wise to have an attorney review them.

9. Understand How Disputes Will Be Resolved

Before there’s a disagreement, your contract should already spell out the process:

• Whether disputes go to mediation, arbitration, or court

• Governing law (for Colorado businesses, typically Colorado law)

• Where disputes will be handled (county or jurisdiction)

• Whether the winning party can recover attorney fees

A clear dispute resolution section can save time, money, and stress.

10. Confirm Legal Compliance

Your contract should comply with any applicable laws and industry regulations, including:

• Colorado and federal business laws

• Licensing or permitting requirements

• Employment, wage, and independent contractor rules

• Privacy or data protection requirements, where applicable

If you’re not sure whether your contract complies with current law, legal review is especially important.

11. Double-Check Signatures and Execution

A contract is only effective if it is properly signed and executed:

• Signature lines for all parties

• Printed names and titles (for business signers)

• Date lines for each signature

• Initials on each page or key sections (optional but helpful)

Make sure the person signing for the other business is authorized to do so.

12. Attach Exhibits, Schedules, and Addenda

Many important details are included in attachments. Confirm that all referenced documents are attached and complete:

• Statements of Work (SOWs)

• Pricing sheets or rate schedules

• Project timelines or milestones

• Policies, procedures, or terms referenced in the main contract

If the contract refers to an exhibit that isn’t included, request it before signing.

When Should You Have an Attorney Review a Contract?

You should strongly consider having a business attorney review your contract if:

• The dollar amount or risk is significant

• You don’t fully understand a section or clause

• The other party drafted the agreement

• You’re entering a long-term relationship (partner, vendor, or major client)

• You’re unsure how the contract interacts with other agreements you’ve signed

Get Help Reviewing Your Business Contract

At Trust Johnson Law, we help Colorado business owners understand and negotiate contracts so they can move forward with confidence. Our goal is to protect your time, money, and peace of mind—so you can focus on growing your business.

Ready to review a contract or draft a new one?
Contact Trust Johnson Law today to schedule a consultation and make sure your next agreement truly protects your business.