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Contracts

Contract review or contract drafting: which do you need?

The two pieces of work sound similar and cost differently. Choosing the wrong one wastes money, usually by spending review fees on a document that should have been rewritten.

The straightforward cases

If someone has sent you their agreement and asked you to sign it, you need a review. The document exists; the question is what it does to you.

If you need terms of your own — because you are selling a service, engaging contractors, or documenting a deal that so far exists only in emails — you need drafting. There is nothing to review.

Most enquiries are one or the other, and the answer takes about ten seconds.

The case that catches people out

The awkward case is the agreement you already have and are no longer confident in: something adapted from a template, or drafted years ago for a business that has since changed shape.

The instinct is to have it reviewed and patched. Sometimes that is right. Often it is not, because the cost of identifying every problem in a poorly structured document, and then fixing each one without creating new inconsistencies, exceeds the cost of drafting a clean one.

A short answer: if the structure is sound and specific clauses need attention, amend it. If the structure does not reflect how the business actually works, replace it.

What a review gives you

A review tells you what you are committing to, where the risk sits, and which points are worth raising. It equips you to negotiate. It does not, by itself, produce a redrafted document or correspondence with the other side — that is a wider scope, and it should be priced as one.

The useful output of a review is not a list of every clause that could theoretically be improved. It is a short, ranked account of what actually matters, so you can decide which two or three points to push on and which to accept.

What drafting gives you

Drafting starts with the commercial terms, not the document. In practice, a good deal of drafting work is helping a client decide things they have not yet decided: what happens if the client cancels halfway, who owns the work, what notice either side has to give.

Those decisions are the hard part. Once they are made, the document follows fairly quickly.

The output is an agreement that reflects the deal, plus — where you will use it repeatedly — a structure you can reuse with a short schedule for each engagement, rather than a fresh negotiation every time.

A note on templates

Template agreements are not worthless. As a starting point for structure they save time, and every competent practice uses precedents.

The failure mode is different: a template drafted for one relationship, applied to another, with the parties' names changed and the mismatched parts left in. That is where you find liability caps that do not fit the contract value, intellectual property clauses that assign the wrong thing, and termination provisions that reference services nobody is providing.

If you are working from a template, the question worth asking is not whether it is well drafted in the abstract, but whether it describes what you and the other side have actually agreed.

How to decide quickly

A rough test that gets most cases right:

  • Someone sent it to you and wants it signed — review
  • You need terms to send to other people — drafting
  • You have an agreement that broadly works but one part worries you — review
  • You have an agreement that no longer describes your business — drafting
  • You are not sure — send it over; working out which applies is part of the job

This article is general information. It is not advice on your matter, it cannot take account of your circumstances, and the law changes. If you have been asked to sign something, take advice on the document in front of you.

Need advice on your own document?

Send it across with whatever you have been told about it, and we will confirm whether we can assist.