TranslateContract Negotiation: 5 Red Flags to Watch Out For
Contract Negotiation: 5 Red Flags to Watch Out For
Contracts are the lifeblood of commercial relationships, but they can also be minefields of hidden liability. Knowing what to look for can save your business from disastrous consequences down the line.
Uncapped Liability
Never accept a contract where your liability is uncapped. Always negotiate a limitation of liability clause that caps your exposure, typically to the amount paid under the contract over the previous 12 months.
Overbroad Indemnification
Indemnification clauses require you to pay for the other party's legal defense if they are sued because of your actions. Ensure these clauses are narrowly tailored and mutual where appropriate.
Vague Termination Rights
A contract should clearly state how and when either party can terminate the agreement. Beware of contracts that lock you in perpetually or allow the other party to terminate for convenience while denying you the same right.
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Vicky Smolyar
Senior Trademark & Copyright Counsel
Vicky loves guiding entrepreneurs through trademark prosecution, brand protection, and core corporate matters. She is incredibly passionate about comprehensive brand and intellectual property protection.
Related Service: Commercial Contracts
Drafting, reviewing, and negotiating complex commercial agreements, SaaS contracts, and licensing deals.
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