Think you don't need to read that contract? Think again

Contracts can be overwhelming documents, between the length of them and the fact that they are often full of legalese. Because of this, people can be tempted to just sign them and hope for the best.

However, this can be a very costly mistake, especially if the contract will dictate the expectations and boundaries of professional relationships. For reasons we examine below, you will want to be sure you read and review all contracts with an attorney prior to signing them.

You should know your responsibilities

Especially in a professional or employment environment, you should know what you are agreeing to do and what you are agreeing not to do. As an employee, are you giving up your options to work at a competing company? As a commercial buyer, are you agreeing pay massive real estate commissions? As a vendor, are you agreeing to perform certain services you normally don't perform?

You should watch out for questionable terms or penalties

If you don't read a contract, you could be agreeing to overly harsh penalties for non-performance. You could also end up agreeing to terms to which you would otherwise object. For instance, a Wi-Fi company recently performed an experiment on users. It added a clause in their terms and conditions that bound signers to performing 1,000 hours of community service. Roughly 22,000 people signed up, likely unaware of the clause.

You should negotiate for what you want

In most cases, a contract can and should be adjusted to reflect both parties' best interests. Reading a contract helps you understand where you might need to make changes or negotiate a compromise. Adjusting a contract until it is fair and agreeable to both parties can only be possible when both parties have actually read the document.

Reading and understanding a contract before signing it is one of the easiest ways to prevent costly, bitter legal disputes down the road. It can help you avoid contract breaches, clarify expectations and secure a fair and enforceable agreement.