Start with the bad day
A contract is a plan for what happens when something goes wrong. The rest is description.
When a new agreement lands in your inbox, it is tempting to read it top to bottom and focus on the price and scope. We recommend the opposite. Go straight to the five clauses below, understand them, and then decide how hard to negotiate everything else.
The five clauses, in reading order
- Limitation of liability: is there a cap, and does it apply to both sides equally?
- Indemnity: who defends whom against third-party claims, and for what?
- Termination: can either side leave for convenience, and on how much notice?
- Payment: when is money due, and what happens when it is late?
- Disputes: which state, which court, and is there mediation first?
If you only have ten minutes with a contract, spend them on the five clauses that decide who pays.
Mutual is not always equal
A mutual indemnity can still favor one side if only one side realistically causes third-party claims. Read each obligation against how the relationship will actually work, not just whether the words are symmetrical.
| Clause | Ask for | Accept if |
|---|---|---|
| Liability cap | Twelve months of fees | Carve-outs are narrow |
| Termination | Thirty days for convenience | Fees are prorated |
| Late payment | Interest and suspension rights | Notice comes first |
Questions owners ask
Should small contracts get the same review?
The same five clauses, yes. A short read of those terms takes minutes and catches most of the risk.
Can we use one template for every customer?
Often, with a set of pre-approved fallback positions for the terms customers push back on.
General information only, not legal advice for any specific situation.
