Why You Need Contract Review Before Entering the Agreement?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "Luxury Car Owner Sues Neighbor To The Court For Cat Scratches", read also "I Have a Contract Whose Goods Have Not Been Delivered, How Do I Sue Under Indonesian Law?", and on this occasion we will discuss about 'Why You Need Contract Review Before Entering the Agreement?'

Legal Term

The word "review" in Indonesian can be found in its equivalent in the words checking or considering. In this short article, the word 'review' is deliberately kept, assuming this word is already quite commonly used. The difference between reviewing an agreement and making an agreement is that when we make an agreement, we design the agreement from nothing. Meanwhile, by reviewing the agreement, it means that we review the concept of an existing agreement that has not been signed, after it has been reviewed and agreed upon by the parties, the agreement will be signed.[1]

Purposes of Contract Review

There are several purposes for contract reviewing:[2]

1. To ensure that all the objectives and will of the parties have been entered into the agreement, so there are no more changes or additions.
2. To ensure that the contract has fulfilled the legal requirements of the agreement, does not conflict with the laws and regulations, propriety, and public order.
3. To ensure that the contract does not contain elements of coercion, fraud, and oversight.
4. So that the parties avoid the risk of loss or disputes in the future due to errors in writing or interpreting the contents of the contract.

The Steps for Reviewing The Agreement

Technically, here are the steps for reviewing an agreement:[3]

1. Create an agreed process flow scheme so that it will be easy to see the rights and obligations of each party.
2. Pay attention to the validity of the legal subject in the comparison section of the agreement. Incorrectly mentioning the legal subject who is authorized to sign the agreement can be very fatal consequences.
3. Paying attention to the relationship between the legal subject and the legal object of the contract.
4. Pay attention to the rights and obligations of each signatory of the agreement, especially the rights and obligations of your client.
5. Pay attention to the use of sentences (not contain multiple interpretations).
6. Cross check with existing and latest regulations to find out whether the agreement is contrary to applicable law (especially for the agreed material/object). For this, advocate is required to update its knowledge of the applicable legal regulations.
7. Request an explanation from a credible source regarding the agreed material, if necessary.
8. Hold a meeting with the other party who will sign the agreement.

The Role of Advocates in Contract Review

The roles and functions of advocates in reviewing or analyzing an agreement are as follows:[4]

1. The party who will make the contract can consult with advocate regarding the contents of the contract and how to draw up a good and correct contract so as to avoid legal risks and losses in the coming days.
2. Requesting an advocate to review the contract that has been made in accordance with the aims and objectives of the parties and to avoid the risk of loss and disputes in the coming days.

And if you about to enter an agreement, you or your company may invite us to review before you sign it, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "TUGAS MEREVIEW PERJANJIAN OLEH BAGIAN LEGAL PERUSAHAAN", business-law.binus.ac.id., Diakses pada tanggal 17 Februari 2022, https://business-law.binus.ac.id/2016/05/05/tugas-mereview-perjanjian-oleh-bagian-legal-perusahaan/

2. "Review / Analisa Resiko Perjanjian / Kontrak", www.advosquare.com., Diakses pada tanggal 17 Februari 2022, https://www.advosquare.com/solusi-hukum/review-analisa-resiko-perjanjian-kontrak#

3. Op. Cit., business-law.binus.ac.id.

4. Op. Cit., www.advosquare.com.