Contracts are the foundation of most professional, commercial, and personal relationships. From employment and service agreements to leases and business partnerships, contracts define expectations, obligations, and consequences.et, many disputes that end up in court could have been avoided at the signing stage.
At LawHaven Solicitors, we regularly advise clients who only realise the implications of their contracts when things go wrong. This article highlights common mistakes people make when signing contracts and how to avoid them.
1. Never Sign What You Do Not Clearly Understand
A contract is a legally binding document. Once signed, the law assumes you understand and agree to its terms.
Legal expressions such as indemnity, liquidated damages, termination for convenience, or force majeure carry significant legal implications. Signing without understanding these clauses can expose you to unexpected liabilities.
Best practice:
Ensure every clause is clear to you. If it cannot be explained in plain terms, seek clarification or legal advice before signing.
2. Resist Pressure to Sign in a Hurry
Time pressure is a common reason parties sign unfavourable contracts. Phrases such as “this offer expires today” or “it’s just a formality” should prompt caution.
A legitimate agreement allows reasonable time for review. Where urgency is imposed without justification, it may indicate imbalance or risk.
Best practice:
Take adequate time to review and reflect. A contract that is fair today will remain fair after proper review.
3. Ensure All Key Terms Are Documented
Verbal assurances, emails, or informal promises made during negotiations have little value if they are not incorporated into the final contract.
Courts rely primarily on the written agreement, not on conversations or intentions.
Best practice:
Ensure all important terms, especially payment, duration, renewal, and exit rights are expressly stated in the contract.
4. Pay Close Attention to Termination Clauses
The termination clause determines how and when a contract can be brought to an end. Many parties overlook this section, only to discover later that exiting the agreement is costly or impossible without penalties.
Key questions to ask:
- Can either party terminate the contract?
- What notice period is required?
- Are there financial consequences for early termination?
Understanding this clause protects you if circumstances change.
5. Verify the Identity and Authority of the Other Party
Before signing any contract, confirm:
- The correct legal name of the individual or company
- Registration details (for corporate entities)
- That the signatory has authority to bind the party
Contracts signed with unauthorised persons or non-existent entities can be difficult to enforce.
6. Watch for One-Sided or Unbalanced Clauses
Some contracts disproportionately favour one party by:
- Limiting one party’s liability while expanding the other’s
- Allowing unilateral changes to key terms
- Imposing penalties without corresponding obligations
While not every contract will be perfectly equal, excessive imbalance should raise concern.
7. Do Not Assume “Standard” Means “Safe”
“Standard” contracts are often drafted to protect the interests of the party who prepared them. Employment contracts, tenancy agreements, and service contracts frequently contain clauses that may not align with your interests.
Best practice:
Review every contract on its own merits, regardless of how common it appears.
8. Ensure Payment Terms Are Clear and Enforceable
Disputes over payment are among the most common contractual conflicts.
Confirm:
- Amount payable
- Method of payment
- Consequences of late or non-payment
Vague or open-ended payment clauses often lead to disagreement.
9. Never Sign Incomplete or Blank Documents
Signing blank pages, incomplete schedules, or documents “to be filled later” exposes you to serious risk. Any alteration made after signing can bind you legally.
Ensure all pages are completed, reviewed, and properly initialled before execution.
10. Seek Legal Review Where Necessary
Legal review is not a sign of distrust; it is a sign of diligence.
A lawyer can identify risk, suggest amendments, and ensure the contract aligns with your interests and applicable laws.
In many cases, the cost of legal advice is minimal compared to the potential cost of litigation or financial loss.
Conclusion
Contracts are not mere formalities. They are enforceable legal instruments with long-term consequences.
Avoiding mistakes at the signing stage is one of the most effective ways to protect your business, finances, and professional relationships.
At LawHaven Solicitors, we provide contract review, drafting, negotiation, and advisory services to individuals and businesses across Nigeria. If you are about to sign an agreement or have concerns about an existing contract, obtaining legal guidance early can save you significant time and expense.