Let us guess how this usually happens – You win the work. Everyone is excited. A contract arrives. You skim it, spot the commercial points, sign it, and crack on.
Because who has time to read twenty pages of legal wording when there is money to make?
Fast forward a few months, and something goes wrong. Suddenly, that document you flew through is being read very, very carefully by a lot of people. Usually, it includes someone charging by the hour.
We see this occur more often than I’d like. The law is not interested in what you meant. It is interested in what you agreed. If the clause is clear, you are normally stuck with it.
Here are the ones that tend to cause the most damage.
- Indemnities: Who Really Pays When Things Go Wrong?
This is the clause where risk quietly packs its bags and moves into your office. An indemnity can make you responsible for losses suffered by the other side, sometimes without the usual arguments about fault, blame or whether the loss was foreseeable.
Real life example in simple terms.
You provide services. The client suffers a problem. Their customers lose money. They point to the indemnity and say, “Right, you cover it.” That figure can escalate at frightening speed.
The worst part? Many businesses only discover at this stage that their insurance does not line up with what they signed.
We have had calls that start with: “We didn’t think it meant that.”
It often does.
What to do instead: narrow it, cap it, and check it against your policy before you agree.
- Limitation of Liability: Don’t Assume You’re Protected
We regularly hear: “It’s fine, liability is capped.”
Maybe. Maybe not.
Caps can be per claim, per event, or in aggregate. Some obligations might be carved out altogether. Sometimes the drafting is messy enough that everyone ends up arguing about what the cap even applies to.
If lawyers are debating definitions, the meter is running. A cap should give clarity. If it creates confusion, it is not doing its job.
What to do instead: keep it simple, obvious and commercially realistic.
- Termination Clauses: Know When You Can Walk Away
This is where people get trapped. Auto-renewals. Tiny notice windows. Exit rights that favour one party. Requirements that must be followed perfectly.
Miss the date by a week, and you may be in for another year, whether you like it or not.
We once spoke to a business owner who assumed they could leave at the end of the term. They discovered, too late, that notice should have gone in months earlier.
The renewal invoice landed. It was not small.
What to do instead: check how and when you can leave and put the deadline in the diary immediately.
- Dispute Resolution: Future you will care a lot about this
At the start of a relationship, everyone believes they will never fall out…..Then they do!
Where a dispute is heard, and the process you must follow, can massively affect cost and strategy. Travelling across the country, restricted appeal rights, and complicated procedures. It all adds up.
None of this feels important until it suddenly becomes the only thing that matters.
What to do instead: ask yourself whether the clause still feels sensible if the relationship has completely broken down.
- Late Payment Penalties: Hidden Cashflow Risks
You think you are agreeing to be paid in 30 days.
But the mechanism says payment is due after approval, or after sign-off, or after a milestone someone else controls.
Welcome to 60 or 90 days in practice.
We see profitable businesses struggle not because they lack work, but because their contracts quietly push income further and further away.
Cashflow is oxygen. When it tightens, everything hurts.
What to do instead: make sure the reality matches what you think you agreed.
A quick stress test before you sign anything
Ask yourself:
- If this deal goes wrong, where is the biggest cheque likely to come from?
- How quickly can I exit?
- How long will I wait to get paid?
If you don’t like the answers, pause before signing, not after.
Why this matters more than people think
When these clauses explode, the damage is rarely just financial. Management time disappears. Stress levels climb. Relationships fracture. Energy that should be spent growing the business is diverted into firefighting.
Most of it is avoidable.
A proper review at the start usually costs a fraction of the clean-up operation at the end.
We spend a large part of our working life helping businesses that wish they had looked at the contract earlier.
We would much rather help you before it becomes a problem.