It is important to read and understand the agreement, from beginning to end, before you sign it. You give your consent to an agreement when you sign it. Once it is signed by all parties and dated, an agreement becomes a legally binding document. This means you might have payment or other obligations that you might have to fulfil under an agreement and there might be consequences to terminating it, like having to pay compensation and keeping information confidential.
You will need a keen attention to detail. When you are reading an agreement, it’s a good idea to check the following details:
Is your company name and are the details of the other party correct?
Is everything in the agreement correct? It is important to carefully check the payment terms, any confirmations (often called representations or warranties) that you are making about your company and any other important provisions.
Do you understand what you can and can’t do under the agreement?
Does the agreement reflect everything you have agreed? Or is something missing?
Is the agreement governed by a legal system which is acceptable to you and your investors?
Are disputes to be resolved in a court system which is acceptable to you and your investors?
Overall, does it reflect what you have negotiated?
Some clauses may be complicated and difficult to understand. If there is anything that you don't understand or which doesn't make sense, ask a question.