How to read a Contract (Legal contracts review for Non-Lawyers)

Image of a man in an orange shirt looking confused, black background, contract in the top right corner. Caption reads, "How do I read a contract?"


Contracts. Love them or hate them, they’re a major part of business life. And you need to know how to review contracts.

But when you don’t have a Law Degree and don’t have access to any Contract Lawyers to advise you, how can you carry out a contract review process and read – and understand – the contract?

Why do you need to carry out a contract review

A step-by-step contract review ensures that you identify the key contract terms, understand what obligations you or your organisation must comply with, and understand the financial risk of the contract.

It also helps you avoid unnecessary risk before you and your counterpart agree to the parties signing the contract.

The contract review process

As a Contracts Professional or a Non-Lawyer who runs a small business, it’s hard to know how to quickly and easily gain a high-level understanding of the legal documents you must review.

You may ask yourself how to read a contract and conduct a comprehensive review without wasting valuable time.

You may also wonder whether you must get a Contracts Lawyer to advise you when you’re carrying out contract reviews. A Contract Review Lawyer or a legal team – who specialises in carrying out contract reviews – will be invaluable to you. But the good ones can be hard to find, your organisation may not engage them, or you may not personally be able to afford the expense.

Contract Review Checklist

If you need to review contracts and you don’t have a Law Degree or a legal team full of experienced Lawyers, there are certain steps you can take each time.

Follow this contract review checklist and gain a quick, high-level understanding of each legal agreement when you carry out contract reviews:

  1. Determine what industry the works or services relate to (so you know the features the contract is likely to have);

  2. Identify the type of contract (so you can find the similarities with other contracts);

  3. Scan the Table of Contents (look for “high risk” provisions like indemnities, limitations of liability, KPIs, and liquidated damages);

  4. Read the relevant clauses and consider the risk allocation (does it favour your organisation or the other party(s));

  5. Look at the Contract Particulars (these will tell you the details of the contract, eg the parties involved, payment dates, specific contracting events, key provisions, governing law, and the contract price);

  6. Review the Technical Documents (these will tell you what is being done under the contract, ie the scope of works or the scope of services); and

  7. Read the contract (you will understand it better now you’ve carried out the above steps).

You can ensure you have completed a thorough contract review by carrying out the above steps.

Click here to get a copy of this Contract Review Checklist.

This process for contract reviews applies whether the contract is a simple or complex contract, and regardless of how much legal jargon the contract contains.

How to gain a high-level overview of the contract

Here are some more details about the steps (as set out in the Contract Review Checklist) to quickly gain a high-level overview of the contract and review contracts regardless of their type or industry:

1. Determine what industry the contract relates to

There are similarities between many contracts in the same industry:

  • Contracts in the Construction Industry generally have similar features to other contracts in the Construction Industry (eg a defects liability period, the concept of practical completion, construction works insurance and a Statement of Requirements/Specification); and

  • ICT contracts generally have features similar to other (eg Acceptance).

    Image of cranes in the background with construction workers in the foreground facing them. Represents the Construction Industry and the various construction contracts.

2. Identify what type of contract it is

After identifying the relevant industry, ask yourself what type of contract it is. This will help you determine the likely contract terms to consider during the contract review process.

Services Contracts have similar features to other Services Contracts (eg fitness for purpose, professional indemnity insurance, etc. So, if you’ve read a final contract before, say a final Services Contract, you’ll have a good idea what will be in this contract.

Keep in mind that many contracts have similar features to each other. They may contain performance obligations, warranty clauses, dispute resolution provisions, and termination and default clauses.

3. Scan the Table of Contents (looking for provisions like indemnities, limitations of liability, KPIs, liquidated damages, etc)

Have a quick scan of the Table of Contents. Once you’ve read a few contracts, you can start to identify the more unusual clauses in the contract you have to review from a glance at the Table of Contents. This is an important part of the contract review process.

Most contracts have standard “boilerplate” clauses which are pretty similar – particularly at the end of the Terms and Conditions of Contract. These often don’t change during contract negotiation.

You’ll be more interested in the less-usual clauses. For example, any clause with “indemnities” in the title. The Table of Contents gives you a quick overview of what unusual clauses are in the contract.

4. Look at the Contract Particulars

Look at the Contract Particulars or Contract Details (often in Schedule 1). This is an essential part of the contract review process.

Usually, the Contract Particulars contain the variable terms in a contract and the important dates for each of the parties involved.

For example, the payment clause in the contract terms will say that the Contractor gets paid, but the Contract Particulars will say what amount the Contractor gets paid and the timing of the payment (ie the specific payment terms that apply to the contract and the contract parties).

Click here to get a copy of our contract review checklist.

5. Read the relevant clauses and consider the risk allocation

Follow each Contract Particular item back to the relevant clause to see what that clause says.

Often, clause numbers are on the left side of the Contract Particulars table, so it is easy to find relevant clauses.

Alternatively, reference the clause you want to look at (eg payment clause) in the Table of Contents or do a word search for “payment”.

Also, read the clauses you identified from the Table of Contents with the greatest potential ramifications. Consider the risk allocation of the clause and which parties are favoured by the drafting. You need to do this to ensure you’ve completed a thorough contract review.

6. Review the Technical Documents

Check out the documents in the schedules or annexures. These are the technical requirements that say what must be done and to what standard and are present in most contracts.

This is an important part of the contract review process, as you need to understand the purpose of the contract, and you will find this in the technical documents.

7. Read the contract

Depending on the task you are carrying out, if you need to conduct a comprehensive contract review, you will need to read the contract.

However, the above steps will help you get a high-level overview of the legal document as you review the agreement.

Should you review contracts on your computer or on paper?

You can review contracts in browser or you can carry out contract reviews on paper contracts.

It’s sometimes easier to print out the contract, so you can see many of the provisions of the agreement on the same page and understand its key points. Where you come across unclear terms, it is often simpler to review those terms on paper rather than in Microsoft Word.

Contract review software

Contract review software may help you to review contracts. You may also be able to upload your contract review checklist.

But it’s important that you learn to carry out this core skill yourself, so you can review contracts at any time, including on a printed-out contract, during a power outage, if your battery fails, in a meeting with the other party, and so on.

Never underestimate the power of physically highlighting important clauses on a contract while reading them. I’m sure this has been extensively studied – somehow, your mind is able to assimilate information better when that information is printed on paper rather than on a computer screen.

Contract automation software and AI

Contract automation software will not likely be useful to you in the contract review process.

Artificial intelligence programs are starting to become better at summarising the key points of a contract. I expect to see refined, and new AI programs become more and more useful in helping you carry out contract reviews, particularly when you don’t have a Law Degree of a legal team available to you.

Reviewing contracts that are templates or precedents

If your organisation uses contract templates, you can carry out these steps on the precedent, so you know in advance how the contract works and what provisions the contract contains.

Each time your organisation creates a new contract from the template, you then only have to review the amendments from the base template document.

This cuts down on the amount of work you need to have your in house lawyers undertake.


This post contains some practical ways of simplifying the review of a legal contract, particularly when you do not have a Law Degree.

The more you understand the contracting process, the easier the contract review will be.

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