Checklist · Business

Drafting, Reviewing, and Enforcing a Contract: A Practical Checklist

15 U.S.C. § 45

Type
Checklist
Jurisdiction
National
Date
2025-07-26
Topic
Business

This checklist covers a contract from the decision to negotiate through breach and enforcement. It opens with the diligence that should precede any signature — the counterparty's exact legal name, its ability to pay a judgment, and who has authority to sign. It then walks clause by clause through review, flagging the provisions that decide outcomes and the ones people skip. It covers drafting discipline, execution mechanics, and the administration calendar that prevents most breaches. Separate parts cover responding to a breach, sending a demand, mitigating, valuing a claim against the liability cap, and preparing to enforce. Warnings mark the steps that are irreversible and the technical failures that most often defeat an otherwise good position.

Drafting, Reviewing, and Enforcing a Contract: A Practical Checklist

Business > Contracts | Published 26 July 2025 - Updated 15 July 2026 | UpLaw - uplaw.us

⚠ Two rules govern this checklist. Confirm the counterparty's exact legal name and whether a judgment against it would be collectible. And follow the contract's own procedures exactly when anything goes wrong.

Stage 1 — Before negotiating

☐ Identify the counterparty's exact legal entity — name, type, and state of formation. ⚠ Contracting with an asset-less operating subsidiary is a recurring and avoidable disaster.

☐ Check whether it can pay a judgment — entity status, litigation history, and public financial signals. See judgment enforcement and debtor exemptions.

☐ Confirm who has authority to sign, and obtain evidence of it for significant agreements.

☐ Decide your three must-have terms and three walk-away terms, in writing, before the first call.

☐ Decide whether a guaranty, a deposit, insurance, or a letter of credit is required.

☐ Determine which law applies — Article 2 for goods, common law otherwise, and predominance for mixed contracts.

☐ Check for mandatory regulation — consumer cooling-off rights at 16 C.F.R. part 429, the holder rule at 16 C.F.R. part 433, credit disclosures at 12 C.F.R. part 1026, and unfair practices under 15 U.S.C. § 45.

Stage 2 — The term sheet

☐ Agree the commercial terms first — scope, price, timing, and term.

☐ Mark it non-binding, except for any confidentiality or exclusivity intended to bind.

☐ State the dispute resolution intention so it is not a surprise at the end.

☐ Identify the risk allocation in principle — caps, indemnity, and insurance — because those terms trade against each other.

☐ Set a signing deadline and a drafting responsibility.

Stage 3 — Reviewing a draft

Parties and structure

☐ Exact legal names, entity types, and addresses. ☐ Any affiliate obligations, and whether a parent guaranty exists. ☐ Defined terms used consistently throughout.

The deal

☐ Scope and deliverables described specifically enough for a stranger to verify. ☐ Specifications attached rather than described. ☐ Acceptance criteria and the process for rejection and cure. ☐ Schedule, with dates or triggering events rather than "promptly." ☐ Price, payment triggers, invoicing, late charges, and set-off rights.

Duration and exit

☐ Term, and how it renews. ⭐ Calendar the renewal notice deadline the day you sign; automatic renewal happens silently. ☐ Termination for cause: what counts, what notice, what cure period. ☐ Termination for convenience: whether it exists and whether it is mutual. ☐ Survival: which obligations outlast termination. ☐ Wind-down and transition assistance.

Risk allocation

☐ Limitation of liability — the cap, and its carve-outs. ⭐ Frequently the most financially significant clause in the document. ☐ Consequential damages waiver, and what is excluded from it. ☐ Warranties, and disclaimers — which must be conspicuous, and for merchantability must use the word. ☐ Indemnity — trigger, defense obligation, coverage of the indemnitee's own negligence, caps, and procedure. ☐ Insurance — types, limits, additional insured status, and certificate delivery before performance. ☐ Force majeure — whether it lists the events you fear, and what it says happens.

Dispute resolution

☐ Governing law and forum. ☐ Arbitration or litigation, and if arbitration, the provider, seat, and award form. See arbitration and 9 U.S.C. § 2. ☐ Jury waiver. ☐ Fee shifting — ⚠ it cuts both ways. ☐ Any contractual shortening of the limitations period. ☐ Any mandatory mediation or notice step that is a condition precedent.

General provisions

☐ Notice — method, address, and effectiveness. ⚠ This clause decides whether your later termination or claim was validly made. ☐ Assignment and change of control. ☐ Integration clause — which erases the negotiation. ⭐ If a promise matters, put it in the document. ☐ Amendment — writing required, and whether email suffices. ☐ Severability. ☐ Counterparts and electronic signature, valid under 15 U.S.C. § 7001. ☐ Confidentiality, and its duration. ☐ Intellectual property ownership and licenses.

Stage 4 — Drafting discipline

☐ One word for one concept; never two words for the same thing. ☐ Define terms once, capitalize them, and use them exactly. ☐ Use "shall," "will," "may," and "must" consciously. ☐ Distinguish promises from conditions deliberately — "if," "provided that," and "subject to" create conditions. ☐ Give each obligation its own sentence with a named actor. ☐ Bound every deadline by a date or a trigger. ☐ Attach exhibits and reference them precisely. ☐ Read it once as the counterparty and once as a judge with no context. ☐ ⭐ Test: could a stranger three years from now determine what each party had to do and what happens if they did not?

Stage 5 — Execution

☐ Confirm signing authority — an officer, a manager, or a person with a delegation of authority. ☐ Confirm the entity name in the signature block matches the preamble. ☐ Initial every exhibit if the practice is used, and confirm all exhibits are attached. ☐ Date the agreement, and note any separate effective date. ☐ Obtain a fully executed copy, with every page. ☐ Deliver the insurance certificate before performance begins. ☐ Deliver any guaranty, signed by the guarantor personally. ☐ Confirm any statute of frauds category is satisfied by the signed writing — land, over one year, a guaranty, or goods above the threshold. ☐ Store the executed original where it can be found in five years.

Stage 6 — Administration

☐ Build a contract file — executed agreement, exhibits, amendments, and the negotiation record.

☐ Calendar every date: term end, renewal notice deadline, price escalations, insurance renewals, reporting and audit windows. ⭐ The renewal notice deadline is the most commonly missed date in commercial practice.

☐ Name an owner responsible for performance and the calendar.

☐ Create a one-page summary — parties, term, price, key obligations, liability cap, notice address and method, dispute resolution.

☐ Confirm every change in writing, referencing the amendment or change order provision, the same day.

☐ Keep acceptance records for every deliverable.

☐ Collect insurance certificates annually and read them.

☐ Document performance problems contemporaneously and neutrally, before anyone is angry.

☐ Review the portfolio annually for auto-renewals, changed counterparties, dissolved entities, stale caps, and inconsistent forum clauses.

Stage 7 — When something goes wrong

☐ Read the contract before doing anything — notice, cure, termination, dispute resolution, and the cap.

☐ Keep performing unless the breach is material and the contract permits suspension. ⚠ Terminating for a minor breach makes you the breaching party.

☐ Assess materiality — deprivation of expected benefit, adequacy of compensation, forfeiture, likelihood of cure, and good faith.

☐ Send notice exactly as the contract requires — method, address, and content.

☐ Give any cure period, and document what was and was not cured.

☐ Demand adequate assurances if the signal is ambiguous rather than a clear repudiation.

☐ Mitigate immediately — cover, re-let, resell, or replace — and keep the file that proves the effort. ⭐ Damages that could have been avoided are not recoverable.

☐ Preserve records and issue a litigation hold. See the civil discovery and evidence preservation toolkit.

☐ Assemble the damages proof — invoices, cover quotes, cost records, and the correspondence showing what the other side knew about downstream consequences at contracting.

☐ Value the claim against the cap and the waiver, not against the felt injury.

☐ Check the limitations period, including any contractual shortening. See statutes of limitations and repose.

☐ ⚠ Write every communication as though it will be an exhibit.

Stage 8 — The demand letter

☐ Identify the agreement, the date, and the parties. ☐ Quote the provision breached. ☐ State the facts of the breach, with dates. ☐ State the cure requested, specifically. ☐ State the deadline. ☐ Reserve all rights. ☐ Send by the method the notice clause requires, and by a method that proves delivery. ☐ ⚠ Do not argue, characterize, or threaten beyond what the contract permits. Do not concede any fact. Do not waive any right by implication. ☐ Note whether settlement discussion protections under Federal Rule of Evidence 408 apply to what follows.

Stage 9 — Enforcement

☐ Comply with any condition precedent — mandatory notice, mediation, or negotiation periods.

☐ Determine the forum — arbitration under 9 U.S.C. § 4, or court under the contract's forum clause.

☐ Confirm jurisdiction and venue — 28 U.S.C. § 1332, § 1391, and removal at § 1441.

☐ Plead the elements — a valid contract, your performance or excuse, breach, and damages — under Rule 8, with particularity for any fraud claim under Rule 9.

☐ Plead alternatives — unjust enrichment, misrepresentation, and any statutory claim, which may escape the liability cap.

☐ Anticipate a motion to dismiss under Rule 12 and a summary judgment motion under Rule 56; unambiguous language plus undisputed performance resolves contract cases early.

☐ Consider an offer of judgment under Rule 68.

☐ Plan discovery around the documents, which decide these cases. See civil discovery.

☐ Assess collectability before filing, not after judgment.

The eight technical failures that decide cases

  1. The wrong entity named, producing an uncollectible judgment.
  2. Notice sent by the wrong method, making a termination ineffective.
  3. Termination for a minor breach, converting the terminator into the breaching party.
  4. A promise left out of the document, erased by the integration clause.
  5. No mitigation file, reducing recoverable damages.
  6. Consequential damages unprovable, because nobody showed what the other side knew at contracting.
  7. A missed renewal notice deadline, extending an unwanted agreement for a full term.
  8. A condition precedent skipped, defeating an otherwise meritorious claim.

Worksheet A — Counterparty diligence

Item Finding
Exact legal name and entity type
State of formation and good standing
Registered agent and address
Parent, affiliates, and whether a guaranty is available
Litigation history
Judgment collectability assessment
Insurance carried, and limits
Signing authority verified (how)
Prior dealings and any prior disputes
Regulatory status, if a licensed activity

⭐ The first row is the most important line in this entire checklist. A contract with the wrong entity is a contract with nobody who can pay.

Worksheet B — Clause review scorecard

Score each: A acceptable, N needs negotiation, W walk away.

Clause Score Notes
Scope and specifications
Acceptance and rejection procedure
Price, payment triggers, and late charges
Term, renewal, and the renewal notice deadline
Termination for cause, notice, and cure
Termination for convenience
Warranties and disclaimers
Limitation of liability and its carve-outs
Consequential damages waiver
Indemnity — trigger, defense, caps
Insurance — types, limits, additional insured
Confidentiality and its duration
Intellectual property ownership and licenses
Assignment and change of control
Force majeure — listed events and consequences
Governing law and forum
Arbitration, jury waiver, and fee shifting
Contractual limitations shortening
Notice provision
Integration and amendment
Survival

⚠ The three bolded rows decide more disputes than everything else combined.

Worksheet C — Contract summary sheet

Prepare at signing; keep at the front of the file.

Field Entry
Agreement title and date
Parties, exact names
Effective date and term end
Renewal notice deadline
Price and payment schedule
Key obligations, ours
Key obligations, theirs
Liability cap and carve-outs
Consequential damages waiver
Indemnity summary
Insurance required, certificate on file?
Notice address and required method
Governing law, forum, arbitration
Fee shifting
Contractual limitations period
Assignment restrictions
Owner responsible

Worksheet D — Breach log

Start the day performance first slips.

Date What happened Contract provision Notice given (method, date) Cure period Cured? Cost incurred Mitigation step

☐ Record contemporaneously and neutrally. ☐ Attach the supporting document to each entry. ☐ ⭐ This log becomes the damages proof, the mitigation proof, and the answer to the argument that you waived the breach by continuing to perform.

Worksheet E — Damages computation

Line Item Amount Proof
1 Contract price / value of performance promised
2 Value actually received
3 Direct loss (1 − 2)
4 Incidental costs of dealing with the breach
5 Consequential losses foreseeable at contracting
6 Expenses saved by non-performance
7 Losses avoidable by reasonable mitigation
8 Subtotal (3 + 4 + 5 − 6 − 7)
9 Contractual liability cap
10 Consequential damages waiver applied
11 Liquidated damages, if applicable
12 Interest, costs, and fees if available
13 Recoverable total

⚠ Line 5 requires proof that the other side knew of the downstream risk at contracting. Absent that evidence, the largest number in the computation disappears.

Worksheet F — Pre-litigation decision sheet

Question Answer
What is the recoverable total from Worksheet E?
What is the forum, and what will it cost to get there?
Is there a fee-shifting clause, and which way does it cut?
Is there a contractual limitations shortening, and has it run?
Are there conditions precedent still to satisfy?
Are alternative claims available outside the cap — statutory, tort, restitution?
Is the counterparty collectible?
Is there insurance that would respond?
Would mediation resolve it faster? See preparing for and attending a mediation
What does the relationship cost if this becomes adversarial?

⭐ Answer the collectability question before the merits question. A judgment against an entity that cannot pay is an expensive piece of paper.

Worksheet G — Regulatory overlay screen

Run this for any agreement involving a consumer, a licensed activity, or a regulated product.

Question Provision to check Applies?
Is this a consumer sale made away from the seller's place of business? Cooling-off rights, 16 C.F.R. part 429
Is there a negative option or prenotification plan? 16 C.F.R. part 425
Is consumer credit extended or assigned? Holder rule, 16 C.F.R. part 433
Are credit terms disclosed, or is a rescission right implicated? 12 C.F.R. part 1026
Are electronic transfers involved? 12 C.F.R. part 1005
Could the marketing be deceptive or unfair? 15 U.S.C. § 45
Are electronic records and signatures used? 15 U.S.C. § 7001
Does the agreement contain an arbitration clause? 9 U.S.C. § 2, with a stay at 9 U.S.C. § 3 and compulsion at 9 U.S.C. § 4
Does it involve a transportation worker? Exemption at 9 U.S.C. § 1; Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024)
Does it restrict use of confidential information? 18 U.S.C. § 1836, 18 U.S.C. § 1839

⚠ Mandatory rules cannot be contracted around. A clause purporting to waive a cooling-off right or the holder rule is void, and including it can itself be an unfair practice.

Worksheet H — Arbitration clause decision

If a dispute resolution clause is being drafted or reviewed:

☐ Court or arbitration? Arbitration is faster and private, with almost no appellate review; court permits full discovery, summary judgment, and appeal. ☐ Provider and rules, named, with a fallback. ☐ Seat and locale, convenient enough to be enforceable against a consumer or employee. ☐ Number of arbitrators — one, unless the stakes justify three. ☐ Award form — request a reasoned award. ☐ Delegation — state expressly whether arbitrability goes to the arbitrator; see Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010). ☐ Severability operates by default; a challenge to the whole contract goes to the arbitrator under Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395 (1967), and Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006). ☐ Class waiver, enforceable under AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) — and plan for mass individual filings. ☐ Fee allocation, affordable to the weaker party. ☐ Carve-outs for small claims and provisional relief. ☐ Confirmation and vacatur under 9 U.S.C. § 9 and 9 U.S.C. § 10; appeals are asymmetric under 9 U.S.C. § 16. ☐ ⚠ Invoke it promptly if a suit is filed; litigating first can waive it — Morgan v. Sundance, Inc., 596 U.S. 411 (2022).

See compelling, resisting, or preparing for arbitration.

Worksheet I — Annual portfolio review

☐ List every active agreement, with term end and renewal notice deadline. ☐ Flag every auto-renewal occurring in the next twelve months. ☐ Flag counterparties whose entity status or financial condition has changed. ☐ Flag agreements signed by entities since merged, renamed, or dissolved. ☐ Flag liability caps now out of proportion to the exposure. ☐ Flag missing insurance certificates. ☐ Flag inconsistent forum and governing law clauses across the portfolio. ☐ Flag agreements with no assigned owner. ☐ Confirm all amendments are filed with the base agreement. ☐ Confirm executed originals are retrievable.

⭐ A day spent on this once a year prevents the three most expensive contract surprises: an unwanted renewal, an uncollectible counterparty, and a guaranty nobody remembered signing.

A five-minute review for people who are not lawyers

When a document arrives and there is no budget for a review, do this.

☐ Find the parties. Is the name on the signature block the same as the name in the first paragraph, and is it the company you think you are dealing with? ☐ Search for "terminate" and "renew." How long is this, and how does it end? ☐ Search for "liability." Is there a cap, and what is it? ☐ Search for "arbitration" and "jury." Where would a dispute be decided? ☐ Search for "notice." How must you communicate anything that matters? ☐ Search for "fees." Who pays whose lawyer? ☐ Search for "guarantee" and "personally." Are you signing individually as well as for the company?

⭐ Those seven searches take five minutes and locate every term that will matter if the relationship goes badly. They will not make anyone a lawyer, and they will prevent most of the surprises this checklist exists to address.

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