Why you should get legal advice before signing a contract

Have you recently been asked to sign a contract and are wondering whether legal advice is necessary? If you are considering signing a contract, it is important to ensure that you understand exactly what you are agreeing to. Before you sign on the dotted line, you should take the time to carefully read through the contract as well as having the contract reviewed by a professional.

What constitutes a contract?

A contract is an agreement between two or more parties, and may be made orally or in writing. Wherever possible, a contract should be made in writing, to reduce the likelihood of a dispute arising in the future.

A written contract is a legally binding document that contains various conditions and warranties. You should enter a contract freely and voluntarily, and only if you are comfortable with its terms.

A contract may relate to various types of agreements, including:

What is the significance of a contract?

There are many significant factors that comprise a legally binding contract. The main factors to be aware of include, but are not limited to:

  • A contract is legally binding on you. If you are signing on behalf of your company, the contract is legally binding on your company.
  • A contract may impose obligations on you, including that you do or do not do certain things. This may include that you are liable to pay money, or a number of other requirements or restrictions.
  • A contract may contain clauses that limit the liability of one of the parties, meaning you may be unable to seek compensation or damages if problems arise.    
  • Even if you have previously agreed to something verbally or in writing, a signed contract will typically supersede these agreements and may vary what you previously agreed to.
  • The consequences of breaching a contract, even if inadvertent, can be very costly.
  • Terminating a contract once it is signed is possible, however, must be done strictly in accordance with the terms outlined in the contract.

How would legal advice help?

There are various benefits to having your contract reviewed by a legal professional before entering into an agreement. Some of these benefits include:

  • Their expertise and ability to review and interpret your contract. This includes reviewing and interpreting the fine print and any ‘legalese’ to ultimately ensure the contract accurately records your agreement.
  • Reducing the likelihood of problems or disputes arising as a result of all parties understanding the contract terms from the outset, and by being provided with an opportunity to discuss any potential problems. Any issues or changes to the contract terms are far better addressed prior to signing.
  • A contract may contain terms that are unfair to you, which may otherwise go unnoticed without legal advice. You can read more about unfair contract terms at Consumer Affairs Victoria.

Overall, an experienced lawyer can assist in negotiating the terms of the contract to ensure that your interests are best protected.

How can Sharrock Pitman Legal help?

If you are considering signing a contract, we highly recommend that you obtain legal advice. We have an Accredited Specialist in Commercial Law and we are able to carefully review your contract to ensure that your interests are adequately protected and to advise you of your options. Feel free to contact our Commercial Law team on 1300 205 506 or alternatively fill in the contact form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

For further information contact  
Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.


For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.

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