3 Red Flags in a Business Contract You Should Always Revisit

INTRO

Even the strongest business partnerships can run into trouble when the contract isn’t clear. Agreements are more than formalities — they set expectations, reduce risk, and protect the relationship.

Before you sign (or renew) any contract, take a closer look at these 3 common red flags that could cost you time, money, and peace of mind.

1️⃣ Vague Termination Terms

Every contract should clearly explain:

• How either party can exit the agreement

• How much notice is required

• What obligations continue after termination

Without these details, you may be stuck in a partnership that no longer serves your business — or face unexpected penalties when trying to leave.

Tip: Termination clauses are about flexibility and fairness — both sides should have options if expectations aren’t being met.

2️⃣ One-Sided Indemnity

Indemnification determines who pays if there’s a loss, claim, or mistake.

If the clause shifts all responsibility to you — even for issues caused by the other party — you’re taking on unnecessary risk.

Balanced language might look like:

Each party is responsible for claims arising from their own actions or negligence.

Fair partnerships = fair liability.

3️⃣ Missing Dispute Resolution

Even aligned partners can disagree. When the contract doesn’t outline how disputes will be

handled, you may face:

• Costly lawsuits

• Jurisdiction surprise (wrong state, unfavorable laws)

• Delays that damage operations

Look for details like mediation, arbitration, and governing law. A well-defined process keeps disagreements from escalating.

Why It Matters

A strong contract protects your:

✔ Revenue✔ Time✔ Brand reputation✔ Business relationships

It’s your insurance policy against risk — not just a checkbox to complete quickly.

📌 Before You Sign…

Contracts are legally binding — but many business owners only discover their weaknesses when conflict arises.

If you want to:

• Review agreements with confidence

• Negotiate fair terms

• Reduce legal and operational risk

➡️ We can help.

Strategy by Design — where bold ideas meet smart business.📩 Contact us for a contract review consultation

Contact SBD

🔒 Legal Confident. Growth Ready.

Smart growth requires smart protection. Let's ensure your next agreement strengthens your business — not jeopardizes it.