Reading a contract doesn't mean understanding every word. It means knowing which sections carry real risk, which clauses are negotiable, and which red flags should give you pause. This guide covers what to look for in any contract — and where Scrutr can do the reading for you.
Start with these five sections in every contract
Before reading a contract word for word, go to these five sections first. Payment terms — how much, when, and what happens if they're late. Termination — who can end the agreement, how, and what's owed when they do. IP ownership — who owns the work product, and does it capture anything beyond the scope of this specific project. Limitations of liability — what caps your exposure if something goes wrong. Non-compete and non-solicitation — what are you restricted from doing after the agreement ends. These five sections contain most of the risk in most contracts.
Red flags to look for in any contract
Certain phrases appear consistently in problematic contracts. 'All work product shall be the sole property of' — check whether this captures pre-existing materials. 'Client may terminate with X days notice' — check whether you're owed anything if they cancel. 'Net-60 payment terms' — industry standard for freelancers is Net-14 or Net-30. 'In perpetuity, worldwide, irrevocable' — license grants with these three words give away significant rights. 'At the sole discretion of' — any clause that gives one party unlimited discretion is worth scrutinizing.
What to do when you don't understand a clause
When you encounter language you don't understand, the first step is to look up the specific term — 'indemnification,' 'liquidated damages,' 'force majeure,' 'governing law.' These have specific legal meanings that are consistent across contracts. The second step is to ask yourself what the worst-case interpretation of this clause would be, and whether you'd accept that. Scrutr explains every flagged clause in plain English, which makes this step significantly faster.
What's missing is as important as what's there
The most dangerous parts of many contracts are the protections that aren't there. A freelance contract without a kill fee. An NDA without standard carve-outs. A lease without a clear damage definition. An offer letter without a severance clause. Missing protections are invisible unless you know what to look for. Scrutr checks for 15+ missing protections by contract type — which is why a systematic review catches things a quick read misses.
When to have a lawyer read a contract
A lawyer is appropriate when the financial stakes are high (large equity grants, major liability exposure), when you're signing with a sophisticated counterparty who has their own legal team, or when jurisdiction-specific law is central to the agreement. For standard freelance agreements, NDAs, leases, and offer letters, a lawyer is optional — what you need is to understand what the contract says and identify which terms to push back on. That's what Scrutr is built for.