Malcolm ZoppiSun Oct 22 2023

5 Things to Check Before Signing A Contract 

Signing a contract is an important moment that should not be taken lightly. Whether it is an employment contract or any other type of agreement, it is crucial to carefully review the document and ensure that it aligns with your expectations. By doing so, you can protect your interests and avoid potential issues down the […]

what to look for when signing a contract

Signing a contract is an important moment that should not be taken lightly. Whether it is an employment contract or any other type of agreement, it is crucial to carefully review the document and ensure that it aligns with your expectations. By doing so, you can protect your interests and avoid potential issues down the line.

Here are some key points to consider when signing a contract:

  • Check before signing: Take your time to review the document carefully and make sure that all the terms and conditions are clear to you.
  • What to look for: Pay attention to the job title and duties, working hours, bonus structure, termination provisions, sick leave policies, confidentiality agreements, and any other specific terms that are relevant to your situation.
  • Employment contracts vs job contracts: Understand the differences and the implications of each type of agreement.

When signing a contract, it is crucial to thoroughly review and understand all the terms and conditions. The following are some of the crucial aspects to consider:

Job Title and Duties

Your job title and the associated responsibilities are foundational to your employment relationship. It’s important that these details correlate with the discussions held during the hiring process.

  • Clarification: If there’s any ambiguity or discrepancy between what was discussed and what’s documented, seek clarification from the employer.
  • Documented Changes: If there have been changes post-interview, ensure these are accurately reflected in the contract.

Working Hours

The stipulated working hours in your contract lay the groundwork for your work-life balance.

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  • Overtime: Understand the expectations around overtime and whether it’s compensated.
  • Flexible Working: If flexible working arrangements are important to you, check if these are mentioned and clearly defined in the contract.

Bonus and Commission

Bonuses and commissions can significantly impact your earnings. It’s crucial to have a clear understanding of the related terms.

  • Calculation: Ensure you understand how bonuses and commissions are calculated.
  • Payment Schedule: Check the payment schedule to know when you can expect to receive these additional earnings.

Termination Clause

Understanding the termination provisions is crucial to know under what circumstances the employment relationship can end.

  • Notice Period: Know the notice period required from both parties.
  • Severance: Check if there are any severance provisions in case of termination without cause.

Sick Leave and Confidentiality

Check the sick leave policy and any confidentiality agreements in the contract. Ensure that they align with your expectations and concerns.

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  • Sick Leave Policy: Review the policy to understand your entitlements and obligations.
  • Confidentiality Agreements: Scrutinize any confidentiality agreements to know what is expected from you during and post-employment. This could include non-disclosure of sensitive company information and other proprietary details.

Additional Factors to Consider Before Signing A Contract

When presented with an offer letter or a new contract, it is essential to review all the terms and conditions carefully. Some of the critical things to consider when signing a contract include:

  • Restrictive Clauses: Some contracts may include restrictive clauses, such as non-compete agreements or limitations on working for competitors. Review these clauses carefully to understand their scope and potential impact on your future job prospects.
  • Bonuses and commission: If the contract includes any bonuses or commission, ensure that the terms are clearly defined, including how they are calculated and when they will be paid.
  • At-will employment: It is crucial to understand whether the contract is for at-will employment, which means that either party can terminate the agreement without notice or cause.
  • Probationary period: If there is a probationary period, review the terms, including the duration and any conditions that must be met before becoming a permanent employee.
  • Signing on the dotted line: Before signing any contract, thoroughly read the entire document, including the small print, to ensure that you understand all the terms and conditions.
  • End date: If the contract has an end date, make sure you understand what happens when the contract ends, including any severance pay or extended benefits.
  • Termination of employment: Understand the reasons for which the employer can terminate the employment and any notice period required.
  • Check your contract with your employer before signing: Consider seeking legal advice or discussing the contract with your employer before signing to ensure that you understand all the terms and conditions.
  • Non-solicitation clause: If the contract includes a non-solicitation clause, understand what it entails and whether it restricts your future job prospects.
  • Rights and responsibilities: Review your rights and responsibilities thoroughly, including job title, job description, hours of work, and job responsibilities, to ensure that they align with your expectations.
  • Holidays at certain times of the year: If the contract includes specific holiday arrangements, ensure that they align with your preferences and needs.
  • Include a non-compete clause: If the contract includes a non-compete clause, understand the implications, including the possibility of restrictions on working for a competitor.
  • Including the possibility of flexible working: If the contract includes the possibility of flexible working arrangements, ensure you understand all the terms and conditions.

Conclusion

Before signing a written contract, it is important to take the time to read the small print and ensure that it accurately reflects the role and agreed-upon terms. This is especially true when considering a contract without the direct involvement of human resources, as there may be additional clauses or requirements that are not immediately apparent.

It is essential to consider aspects such as share options, non-disclosure agreements, and what the job entails, including any potential changes to the goalposts or required to take on more work. Similarly, it is important to understand any clauses relating to the ability to refuse to work without any notice, as well as the notice period required should you wish to terminate the contract.

By taking the time to make sure you understand the essential things outlined in the contract and asking any necessary questions, you can avoid potential issues down the line. It is always better to clarify expectations upfront than to deal with problems after the fact.

FAQ

What are the essential things to check before signing an employment contract?

There are several important things to check before signing an employment contract. Here are 10 of the most common ones:

What should I consider before signing the contract?

Before signing the contract, it is important to carefully review all the terms and conditions mentioned in the contract. You should ensure that the job title and duties mentioned in the contract match your expectations and that the start date aligns with your availability.

What are some of the clauses that I need to check in the contract?

Some of the clauses that you should pay close attention to include working hours, termination clauses, sick leave policies, restrictive clauses, confidentiality agreements, and any bonus or employee benefits mentioned in the contract.

What should I verify regarding working hours?

It is important to check how many hours you are expected to work per week or month. Ensure that the stipulated working hours in the contract match your expectations and whether there are any provisions for overtime compensation.

Can you tell me a few things I should check about the job title and duties?

You should ensure that the job title mentioned in the contract accurately reflects the position you are being offered and that the description of your duties aligns with your qualifications and skills.

Why is it important to check the termination clauses?

Checking the termination clauses in the contract is crucial as it determines the circumstances under which either party can terminate the employment. It is essential to understand your rights and obligations in case of termination.

What are restrictive clauses in an employment contract?

Restrictive clauses are provisions that limit or restrict an employee’s activities during or after their employment. These clauses typically include non-compete, non-solicitation, and non-disclosure agreements and are meant to protect the employer’s interests.

Is it necessary to check for any bonus or employee benefits mentioned in the contract?

Yes, it is important to carefully review any mention of bonuses or employee benefits in the contract. Ensure that the package outlined in your contract matches the one discussed during the hiring process and that you fully understand the conditions and eligibility criteria for receiving them.

What should I do if I have any questions about the contract?

If you have any questions or concerns about the contract, it is important to seek clarification from the employer or their representative before signing. It is always better to have a clear understanding of all the terms and conditions before committing to a job offer.

Should I check for any clauses related to future job opportunities or next job?

Yes, if future job opportunities or the possibility of moving to another role within the same company is important to you, it is worth checking if the contract allows for internal movements or promotions and if there are any conditions or criteria that need to be met.

Why is the start date important to check in the contract?

The start date mentioned in the contract should align with your availability and any prior commitments you may have. It is important to ensure that the start date is feasible and allows you enough time to wrap up any existing obligations or arrangements before joining the new employer.

Disclaimer: This document has been prepared for informational purposes only and should not be construed as legal or financial advice. You should always seek independent professional advice and not rely on the content of this document as every individual circumstance is unique. Additionally, this document is not intended to prejudge the legal, financial or tax position of any person.

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Get the specialist support you need

Whether you require specialised knowledge for your business or personal affairs, Gaffney Zoppi can support you.