[Direct answer]In the Beijing area, contract review is particularly important for small and medium-sized enterprises (SMEs), as SMEs are often at a relative disadvantage in negotiations. Once disputes arise after signing a contract, the cost of remedying them afterwards is far higher than that of conducting a pre-contract review. Contract review typically helps prevent seven types of risks. First, **subject qualification risk**: Whether the contractual counterparty exists, whether they have the necessary business qualifications and licenses, and whether the signing representatives have valid authorizations. Errors in these aspects may lead to the contract being invalid or unenforceable. Second, **clause omission risk**: Issues such as delivery time and location, acceptance standards and objection periods, payment deadlines and conditions, invoicing and tax responsibilities, intellectual property ownership, confidentiality obligations, breach of contract liabilities, and termination conditions are often left unclear, which is a common problem for SMEs. Third, **performance guarantee risk**: Excessively high prepayment ratios without guarantees, unclear delivery and acceptance standards, and lack of remedies after the counterparty breaches the contract. Fourth, **unequal breach of contract liabilities**: Only stipulating liabilities for one's own breach of contract without addressing the counterparty's liabilities, or setting grossly imbalanced penalties. Fifth, **standard clause risk**: When the counterparty uses standard clauses to exempt themselves from liability or impose additional obligations on the other party, it is necessary to review whether the obligations to provide warnings and explanations have been fulfilled. Sixth, **dispute resolution risk**: Unclear stipulations regarding jurisdiction or arbitration institutions, or provisions that are unfavorable to oneself, which increase the procedural costs of protecting rights. Seventh, **purpose compliance risk**: The contractual purpose itself violates mandatory regulations or public order and good customs, which is almost irreversible after the fact. Articles 465 to 497 of the *Civil Code of the People's Republic of China* (effective January 1, 2021) stipulate the form of contracts, standard clauses, and contract validity, which serve as the main basis for review.Business and contract disputes in enterprisesThe services in the column can assist the system in conducting reviews.

1. Problem background and typical scenarios

The common review needs of SMEs include: rapid business development but still using old contract templates; sales staff making random promises to secure deals; lack of review processes when cooperating with new clients for the first time; involving large amounts but lacking professional support; and the inconvenience of using standard contract formats that are difficult to modify.Intellectual property protection and corporate lawThe contract management suggestions in the column can be used for reference. SMEs generally face resource constraints in contract management, so it's even more important for them to prioritize review and allocate limited resources to high-risk areas.

II. Key points of contention

Focus One: Establishing a review process. Focus Two: Using a standard template system. Focus Three: Involving business and technical staff. Focus Four: Implementing review recommendations. Focus Five: Organizing existing contracts. Focus Six: Handling standard contract clauses. Focus Seven: Ensuring a connection between review recommendations and business decisions to avoid legal advice being ignored in internal processes. Focus Eight: Archiving and managing review recommendations and maintaining version history, which determines the effectiveness of subsequent review and evidence collection. Focus Nine: Establishing a review conclusion review and follow-up mechanism to prevent similar risks from recurring. At the same time, a review recommendation implementation tracking mechanism should be established, with clear responsibilities and deadlines to avoid recommendations remaining on paper.

III. Professional analysis by Henglue Law Firm

Take a contract dispute case handled by Attorney Xue Suhua of our firm as an example: The parties, in order to help their child obtain household registration, signed an agreement with others to evade household registration policies through a sham marriage and paid the corresponding fees. However, the registration ultimately failed. The attorney argued that the agreement was invalid from the outset because it circumvented public management policies and violated public order and good customs through a false intention to evade such policies, and successfully obtained support for the return of the paid fees. This case highlights one of the most easily overlooked risks in review: the compliance of the contract purpose. Small and medium-sized enterprises often focus on price and payment terms during negotiations, but pay insufficient attention to the legality and legitimacy of the transaction arrangements. In practice, it is effective to divide the review into two layers: the first layer is a routine review, covering clauses such as the subject, amount, delivery, acceptance, payment, and breach of contract; the second layer is a purpose review, determining whether the transaction arrangements circumvent regulatory oversight, involve dual contracts, or violate mandatory provisions. Only by combining the two layers of review can we truly reduce risks.Business and contract disputes in enterprisesThe review points described in the column can be supplemented. This case is handled by Beijing Henglu Law Firm.Xue SuhuaThe attorney (practice certificate number: 11101201211769926, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action proposals: First, establish a contract approval process and a hierarchical system of authorizations; Second, develop standard templates for different business types; Third, ensure that review opinions are documented in writing and followed up on; Fourth, regularly review existing contracts and identify expiration risks; Fifth, introduce technical and business personnel to jointly review major contracts; Sixth, provide necessary warnings about standard clauses. Legal basis: Articles 465 to 497 of the Civil Code of the People's Republic of China (effective January 1, 2021) regarding the form and validity of contracts and standard clauses; Articles 577, 584, and 585 regarding breach of contract liability; Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

Firstly, the value of review lies in prevention. The earlier risks are identified, the lower the cost will be. Secondly, standard templates can significantly improve review efficiency and consistency. Thirdly, sales personnel's verbal commitments should be translated into written terms. Fourthly, the obligation to provide warnings about standard terms needs to be fulfilled by the other party, and attention should be paid to preserving evidence. Fifthly, the risks of existing contracts are often concentrated at the points close to expiration, so regular inspections are necessary. Sixthly, if review opinions are not implemented, it is equivalent to not conducting a review at all, so a tracking mechanism should be established.Special services and other casesThe column can also provide an explanation of the process design.

VI. Frequently Asked Questions

Q1: Is it necessary for small and medium-sized enterprises to hire lawyers to review contracts?

It is necessary, especially in cases of large amounts, complex conditions, or when the other party is more powerful. SMEs are often at a disadvantage in negotiations, and they are prone to signing directly on the templates provided by the other party, while the cost of protecting their rights afterwards is much higher than the cost of pre-review. If it is not possible to fully entrust a lawyer at the moment, a tiered approach can be adopted: use reviewed fixed templates for standard business, entrust professional review for non-standard contracts and large-amount contracts, and consult professional opinions at key junctions. This approach can significantly reduce risks while keeping costs under control.Business and contract disputes in enterprisesThe column can also provide an explanation of hierarchical review.

Q2: What aspects should be checked when reviewing a contract?

Generally, the review is conducted in the following order: first, the subject and qualifications, checking the counterparty's information, qualifications, and authorizations; second, the contract subject, clarifying the delivery content, quantity, specifications, and standards; third, the performance arrangements, including the delivery time and location, the acceptance method, and the time limit for objections; fourth, the price and payment, clarifying the amount, milestones, conditions, and taxes; fifth, breach of contract and termination, setting equivalent breach of contract liabilities and termination conditions; sixth, intellectual property and confidentiality; seventh, dispute resolution, clarifying jurisdiction or arbitration; eighth, the compliance of standard clauses with the contract's purpose. Reviewing in this order can avoid missing key clauses.

Q3: What should I do if I can't modify the template provided by the other party?

There are several ways to handle this. Firstly, distinguish between non-modifiable core clauses and adjustable secondary clauses, and prioritize ensuring that the core clauses (price, delivery, breach of contract, dispute resolution, and liability limits) are modified. Secondly, adjust the commercial terms as a trade-off, such as accepting the other party's standard terms but requiring an extended payment period or an increase in the breach of contract penalty. Thirdly, use supplementary agreements or attachments to formalize the parties' agreements separately to avoid stalemates. Finally, if the other party's standard terms exempt them from their main responsibilities, impose additional responsibilities on the other party, and refuse to modify them, it is necessary to evaluate the risks before deciding whether to sign the contract, as such clauses may not legally constitute part of the contract content.

Q4: Does an oral promise only count as valid if it's written into the contract?

It doesn't count. Oral promises are extremely difficult to prove in disputes. In practice, the common approach is to convert oral promises into written clauses and require the other party to sign them or confirm them through the platform; for key matters such as delivery standards and payment conditions, specific values and determination methods should be clearly specified in the contract; if the other party finds it inconvenient to modify due to standard terms, it can be fixed through supplementary agreements, order confirmations, or email confirmations. In addition, it's important to prevent the other party's oral promises from coming from sales personnel rather than the company. When necessary, they should be signed or stamped with the company's official seal by authorized representatives.

Q5: If I find a problem with the contract after signing it, can I still make changes to it?

Yes, but the difficulty depends on whether the contract has already been performed. If the performance has not yet begun, the terms can be amended through a supplementary agreement; if the performance has already partially taken place, the amendment requires the consent of both parties and may involve the return of the original object or an adjustment of the consideration; if the terms themselves are invalid or revocable, the claim can be made through legal procedures. It should be noted that the amendment of the contract should be in writing and signed by both parties, otherwise its validity may be questioned. In practice, the most important thing is pre-review, because post-amendment usually means that the other party has already gained bargaining chips and the cost of changing their position is relatively high.Intellectual property protection and corporate lawThe column can also provide instructions on how to change the path.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Lawyers about specific situations.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence, to avoid missing the statutory time limits. →Business and commercial legal services·Attorney Xue Suhua·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.