5 Things to Review to Make Sure Your Contracts Are Up to Date

Reviewing your contacts regularly is a must. That way, you can make sure all the information is current. If it isn’t, then you can act, ensuring a potentially messy situation is avoided.

However, since contracts can be lengthy and complex, figuring out what to review isn’t always easy. If you aren’t sure where to begin, here are five areas you shouldn’t overlook.

1. Effective Dates

Some contracts are designed to remain valid throughout the length of the business relationship. However, others are only in effect for a specific amount of time, and those dates or periods are usually outlined in the contract.

Examine every document to see if the agreements are only valid for a certain time window and, if so, whether they are still valid. If the contracts have expired (or will soon), you’ll need to reach out to the vendor and get a new agreement in place.

2. Areas Impacted by Legislation

New laws can make prior arrangements invalid. If any aspect of the contract is affected by new legislation, you need to review that section and see if changes are necessary. Otherwise, it isn’t compliant with local, state, or federal law, and that could cause problems for your company.

3. The Scope of the Agreement

Business needs can change quickly. While the contract may have originally covered what you needed at the moment, it was signed, that doesn’t mean it’s an accurate reflection of what you are doing or require now.

If you’ve had a change in the products or services you need from the vendor, then you’ll want to update the contract’s scope as soon as that option is available. At times, this could mean right away. In others, that may mean waiting until the current agreement expires.

In either case, this ensures the document is an accurate reflection of existing business arrangements or how you would like to go forward with the provider. This is particularly important if the relationship shifted organically, and the contract doesn’t cover how the arrangements have already changed.

4. Financial-Related Details

Every time you review a formal, legal agreement, you need to see if any fees or costs outlined represent the best deal possible. Expense standards shift over time. As a result, what may have been a competitive deal a year or more ago might not be a great one today. And, if that occurs, you may need to renegotiate as part of the contract updating process.

5. Certificates of Insurance

It’s crucial to make sure that you have current and valid certificates of insurance for all your providers. If any coverages have lapsed, you are at greater risk.

Which kinds of insurance are necessary may vary? Some states have more requirements than others, so it’s important to understand local law regarding coverage. That way, you can request the proper certificate of insurance documents to update your files.

Ultimately, all five of the points above need to be reviewed. Otherwise, your contracts may not be up-to-date, and that can lead to problems. If you’d like to learn more, the staff at Apogee Managed Solutions can help. Contact us to speak with a member of our knowledgeable team and see how our contracting expertise can benefit you.

Leave a Reply

Your email address will not be published. Required fields are marked *