What an Attorney Looks for When Reviewing Texas Business or Real Estate Contracts

By Attorney & Counselor Stephen M. Ringquist

When an attorney reviews a Texas business or real estate contract, they are not simply looking for a clause that is obviously unfavorable.

We are looking at the agreement as a whole.

What is my client trying to accomplish? What obligations are they accepting? Where is the risk? And what happens if the deal does not go according to plan?

A contract can look straightforward while still creating consequences that may not become apparent until later. That is why a meaningful contract review should consider both the legal language and the practical impact of the agreement.

Does the Contract Match the Deal You Think You Are Making?

One of the first questions I ask is whether the written contract actually reflects what the parties believe they agreed to.

Many transactions begin with conversations, emails, proposals, or term sheets. By the time the formal agreement is drafted, details may have changed, been omitted, or been interpreted differently.

The contract should clearly describe what each party is providing, what they are receiving in return, and what must happen for the transaction to move forward.

What Obligations Are You Taking On?

Contracts can create responsibilities that extend well beyond the obvious financial terms.

Depending on the agreement, those obligations may involve deadlines, insurance, maintenance, access, approvals, reporting, expenses, or continuing performance requirements.

For a Texas landowner, a real estate agreement may also affect how the property can be accessed, used, developed, or managed during the term of the deal.

For a business owner, contractual obligations can affect operations, cash flow, customers, employees, or future opportunities.

The question is not only whether the agreement works today. It is whether the obligations remain workable throughout the life of the contract.

How Is Risk Divided Between the Parties?

Every significant contract allocates risk.

That risk may appear in provisions dealing with default, indemnification, liability, insurance, representations, warranties, damages, or dispute resolution.

The goal is not necessarily to eliminate all risk. Most transactions involve some level of risk.

Instead, I want my client to understand where the risk sits and whether that allocation makes sense given the value of the transaction, the parties involved, and what is at stake.

What Happens If Something Changes?

Most people read a contract while imagining that everything will go according to plan.

I also read it with the opposite question in mind.

What happens if the buyer cannot close? If a project is delayed? If one party stops performing? If financing falls through? If someone wants to terminate the relationship?

Termination rights, cure periods, deposits, extensions, remedies, and notice requirements can become very important when circumstances change.

It is generally easier to address those possibilities before a disagreement exists.

What Rights Are You Giving Away?

This is especially important in real estate contracts.

An agreement may give another party rights involving access, inspections, surveys, testing, extensions, assignments, easements, or activities on the property.

Business agreements may involve rights to intellectual property, customer information, exclusivity, decision-making authority, or assignment.

Before signing, it is worth understanding how much control the agreement gives the other party and whether those rights are appropriate for the transaction.

What Could This Agreement Mean Years From Now?

One of the most important parts of contract review is considering the long-term effect of a short-term decision.

For landowners, today’s agreement could affect future development, agricultural operations, access, financing, family plans, or another potential use of the property.

For business owners, a contract may affect the company’s ability to grow, sell, borrow money, pursue customers, or enter new markets.

That does not automatically make a deal unfavorable. It simply means those consequences should be understood before the agreement is signed.

Contract Review Is About Making an Informed Decision

A good contract review should help answer a few basic questions:

• What am I agreeing to?
• What am I receiving in return?
• What risks am I accepting?
• What control am I giving up?
• What happens if circumstances change?

Not every provision needs to be negotiated, and no contract can remove every possible risk.

The goal is to understand the agreement well enough to make the decision intentionally rather than discovering an important term after the contract is already in place.

If you are considering a Texas business or real estate agreement, Stephen Ringquist at Braun & Gresham can help you understand the contract, evaluate your options, and determine an appropriate path forward before you sign.