10 Contract Red Flags to Watch For
The most common risky contract terms and why they matter.
Unlimited Liability
Unlimited liability means you could be responsible for losses far beyond the value of the contract.
Most commercial agreements include a liability cap to prevent this.
One-Sided Termination Rights
If only one party can terminate the agreement easily, the balance of power is uneven.
Look for termination rights that apply to both parties.
Unilateral Changes
Clauses allowing one party to change terms at any time can create major risk.
Contracts should normally require mutual agreement for material changes.
Broad Indemnity Obligations
Indemnities can shift large amounts of risk from one party to the other.
Check whether the obligation is mutual and reasonably limited.
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