The Contract Red-Flag
Checklist

Where to look: Look in the "Term" or "Renewal" section, usually near the top or bottom of the contract.

A contract that renews automatically with only a 30-day (or shorter) window to cancel can lock you in for another full term if you miss it by a week.

What to do: Note the exact cancellation deadline and put a calendar reminder 45 days before it — before you sign, not after.

Where to look: Search for the word "liability" — there should be a specific dollar figure or multiple of fees paid.

Without a cap, you could be on the hook for damages far beyond what you paid for the service if something goes wrong.

What to do: If there's no cap, that's a real ask for a revision — market standard is 12 months of fees paid.

Where to look: Compare the written payment schedule against your email thread or verbal agreement.

Net-60 written in when you agreed to Net-30 verbally is the most common silent change in vendor contracts.

What to do: Flag any mismatch in writing before signing — verbal agreements don't hold up once the contract is signed.

Where to look: Read the termination clause for both parties, not just one.

If the other party can exit anytime with 10 days notice but you're locked in for the full term, that asymmetry rarely favors you.

What to do: Push for matching termination rights on both sides, or at minimum a "termination for convenience" clause you can also use.

Where to look: Check the geography, time period, and market scope of any non-compete or exclusivity language.

A non-compete written for "12 months, direct competitors" is standard. One written for "5 years, the entire industry" is not — and may not even be enforceable, but it's still worth catching before you sign it.

What to do: Compare the scope against what the relationship actually requires. Anything broader is negotiable.

Where to look: Read the intellectual property section carefully — check if it's scoped to the specific deliverables or written more broadly.

Some agreements assign rights to "all work product," which can unintentionally capture pre-existing tools, methods, or ideas that weren't part of the engagement.

What to do: Confirm the assignment is limited to what was actually created for this specific engagement.

Where to look: Look for the word "indemnify" and check whether it excludes the other party's own negligence or misconduct.

Without carve-outs, you could end up indemnifying the other party even for damage they caused.

What to do: Standard practice is mutual indemnification with explicit exclusions for gross negligence and wilful misconduct on both sides.

Where to look: Check the confidentiality section for a stated end date or survival period.

Indefinite confidentiality isn't always unreasonable, but it's worth knowing you're agreeing to before you sign, especially if it covers information that will naturally become public or outdated.

What to do: A 2-5 year survival period after the contract ends is typical for most commercial agreements.

Where to look: Check for a governing law and dispute resolution clause — arbitration, mediation, or court jurisdiction.

No dispute clause usually means defaulting to expensive court litigation, potentially in a jurisdiction inconvenient for you.

What to do: Confirm the governing law and venue are reasonable for your business, not automatically favoring the other party.

Where to look: Search for "amend" or "modify" and check whether changes require your written consent.

Some agreements let the other party change terms — including pricing — without needing your sign-off on the update.

What to do: Amendments should always require written consent from both parties. This is a straightforward ask to fix.