Payment terms, termination rights and liability caps cause most of the commercial disputes we see. Before you sign anything, read these five clauses twice.
1. Payment and late payment
When is payment due, from what trigger, and what happens if it is late? A contract with no interest or suspension right for late payment gives you nothing to push with.
2. Termination
Can either side walk away for convenience, and on what notice? A one-sided termination clause is the single most common gap we find in supplier agreements.
3. Limitation of liability
A liability cap set at the value of the contract is normal. A cap set at the value of one month’s fees, on a three-year commitment, is not.
4. Intellectual property
If you are paying for something to be created, say in writing who owns it when the invoice is paid. “Licence” and “assignment” are not the same word.
5. Dispute resolution
Which law applies, which courts hear it, and is mediation required first? Getting this wrong can cost more than the dispute itself.
