15 contract red flags to check before you sign (freelance, job, NDA, vendor)

The clauses that cause most disputes - unlimited liability, one-sided termination, IP grabs, payment terms, non-competes, auto-renewal - and the fair version to ask for.

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Most contract disputes come from a handful of clauses that looked harmless when signed. Check these fifteen before you sign anything.

Money

  1. Payment terms - "within 90 days of invoice", or "upon client's satisfaction". Ask for 15-30 days from invoice and objective acceptance criteria.
  2. No late-payment interest. Add it. In India, Udyam-registered micro and small suppliers are entitled to payment within 45 days and to compound interest at 3x the RBI bank rate on delays (MSMED Act).
  3. Unlimited liability - you're liable for all losses. Cap it, typically at the fees paid in the last 12 months, and exclude indirect losses.
  4. Uncapped indemnity - especially for things outside your control. Limit to your own breach or negligence.

Work and scope

  1. Vague scope - "and other related tasks". List deliverables; changes in writing with extra fees.
  2. Unlimited revisions. Specify a number.
  3. Acceptance by silence going the wrong way - "deemed rejected if not approved". Flip it: deemed accepted after X days.

Ownership

  1. IP assignment of everything - including your pre-existing tools, templates and know-how. Assign only the deliverables, after payment; keep a licence to your background IP.
  2. Moral rights waiver / no portfolio use. Ask for the right to show the work.

Exit

  1. One-sided termination - they can end any time, you can't. Make it mutual, with notice and payment for work done.
  2. Auto-renewal with a short cancellation window.

Restrictions

  1. Non-compete. In India, post-employment non-competes are generally void under Section 27 of the Contract Act; restraints during employment can be valid. In the US, several states (e.g. California, Minnesota, North Dakota, Oklahoma) ban most non-competes.
  2. Non-solicit that's really a non-compete (can't work with anyone in the industry).
  3. Training bonds / penalty clauses - courts generally allow only a genuine pre-estimate of loss, not punishment.

Disputes

  1. Unfair dispute clause - courts or arbitration only in the other party's city, or arbitrator chosen by them alone. In India, unilateral appointment of a sole arbitrator by one party has been held invalid by the Supreme Court.

How to push back

Ask politely, with a reason and a fair alternative: "Could we cap liability at fees paid in the previous 12 months? That's standard for engagements of this size." Most counterparties accept reasonable edits.

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