UNITED STATES—We’ve all scrolled through a company’s terms and conditions to check the “I Agree” box as quickly as possible. It’s become instinct to ignore these lengthy texts in the digital age, and this habit impacts other areas of our lives, too; when was the last time you sat down to fully read through a legal agreement?

However, these contracts often include crucial details that have tangible impacts on our daily lives. Thankfully, there are ways to make understanding these documents easier—from learning about their most common clauses to quick, detailed reading strategies.

What’s in a legal contract?

Legal contracts are everywhere in our daily lives. They govern most of our interactions with modern businesses, whether online or in person. If you want to understand what these agreements mean, it’s essential to look at their most important parts:

  • A clearly outlined offer, or the point for the contract,
  • Terms, such as a time period and how both parties will receive services/payment,
  • An explanation of the value both parties receive,
  • Common legal clauses.

What makes a contract legally binding?

By nature, contracts are legally binding, meaning their terms can be upheld by the court system and any breach is punishable by law. However, a few items disqualify a contract from being legally binding:

  • If either party was forced into the agreement,
  • If either party is a minor (a person under the age of legal responsibility),
  • If the terms are unclear or deliberately misleading,
  • If only one party receives value (such as a service, product, or payment),
  • If any part of the contract is illegal.

If any of these qualifications are met, the legal system can decide the contract is not legally binding.

Breaking contracts

Some agreements can be broken by an individual at any moment without consequence. Examples of this include social media applications—you can stop using the service at any point without having to go through a legal process.

However, other contracts are difficult to break. For example, even firing an attorney can be intricate. There are certain ways you can legally end an agreement, including:

  • Mutual agreement,
  • Expiration,
  • Breach of terms,
  • Unanticipated circumstances.

This is one of the significant reasons you must read the contracts you sign. Sometimes, the contract will forbid use of one of the above methods or outline other ways to end the agreement, either within the legal system or apart from it.

Common clauses

There are a few clauses that are present in almost every modern contract. They include:

Force Majeure

This clause protects both parties from a breach of terms if circumstances outside their control prevent the contract’s fulfillment. These circumstances can include natural disasters, wars, or disease.


The payment clause, sometimes called the invoices or the notices clause, details how payment will be handled. It includes dates and times by which payment is expected and the bank details of the parties.


Sometimes, a contract will include a clause that disallows you from getting the service or product from another company. This is not common in contracts between individuals, but it may still happen.

Strategies for quick understanding

Once you know the specifics of what makes a contract and its most common clauses, you can start learning how to understand its often dense and complicated language easily. The best way to do this is to read the contract three times:

First read

The first read should be a quick scan that helps you get an idea of the structure and main clauses. Focus on headings, subheadings, and the first and last sentences of each section. This will help you get an idea of what the agreement is about.

Second read

The second read should be more detailed. Since you’ve already scanned the document, this step won’t take long. If you get stumped, mark the spot and keep reading. The goal is to finish, not to be perfect!

Third read

The third read is for ensuring you understand the more complex points presented in the contract. Go back to the spots you marked and review them until you feel confident about their meaning.

If you are unsure about these sections, you can always search them online or ask a team of professionals for clarification!

Why you should read contracts

Now that you know how simple it can be to read these contracts, you’re ready to take charge of what you agree to. From a simple terms and conditions page to a complex legal document, you’ll never be surprised by contracts again!