As a contract software company, we’ve heard the term “contract review” used in many ways. It’s used to describe the actions taken during redlining and negotiating a contract, and also used to describe the action of going back through a set of signed contracts to analyze the language across them.
What is the difference? And, what is the correct way to use the term? The answer, in short, is that the term “contract review” can be used in both contexts. Legal professionals discuss the function of contract review differently depending on the project in question.
Pre-Signature Contract Review Can Involve Negotiation
Generally, pre-signature contract review is used in the context of a deal that has not been closed yet. Contract review is frequently encountered in the sales context as legal negotiation. This refers to the drafting of contracts and the review of already drafted contracts, pre-signature.
Pre-signature contract review can also require reviewing previously executed contracts for a complex deal. To that end, pre-signature contract review can also require post-signature contract review.
Post-Signature Contract Review Describes Existing
Post-signature contract review involves reviewing and analyzing executed contracts for a specific analysis. This review involves auditing contracts for weaknesses, including any type of review in connection with due diligence. Projects that involve post-signature contract review have the purpose of understanding and describing existing obligations, not negotiating them.
Simply put, pre-signature contract review and post-signature contract review have different intentions. Pre-signature contract review intends to understand terms to negotiate or agree to them. Post-signature contract review intends to understand what has already been agreed to without the intention to negotiate.
When it comes to contract review, both pre-signature and post-signature, your legal team will thank you for providing them with cutting-edge contract management software that makes them more efficient. If that sounds interesting to you, contact LinkSquares today.