Five Contract Clauses Small Businesses Sign Without Reading (and Regret)

By Eugene Bondar, Esq. · Updated September 10, 2026

Most contract disputes I handle were preventable at signature. The same five clauses come up again and again, not because they’re exotic, but because nobody read them. It’s why contract drafting and negotiation is cheaper than the lawsuit that follows the template.

1. Auto-renewal with a narrow exit window

The contract renews for a full year unless you cancel in writing during a 30-day window that starts ten months after you stopped thinking about it. Calendar these the day you sign, or negotiate them out.

2. One-sided indemnification

You agree to defend and indemnify the other side for “any and all claims arising out of or related to” the agreement, including claims caused by their negligence. Indemnity should follow fault. When it doesn’t, you’ve silently become their insurer.

3. Venue and choice-of-law traps

A dispute clause naming a distant state’s courts can make a $40,000 claim uneconomical to pursue, which is exactly the point. For New York and New Jersey businesses, keeping disputes local is often worth more than a price concession.

4. Unlimited liability meets a liability cap: theirs, not yours

Sophisticated counterparties cap their own liability at the fees paid while leaving yours uncapped. Symmetry is the ask: caps for both, with standard carve-outs.

5. IP and work-product ambiguity

Who owns what gets created? “Work made for hire” language that’s missing, or present where it shouldn’t be, is how businesses discover they don’t own their own website, designs, or data. The label only works within its statutory definition. Under the Copyright Act, a “work made for hire” is “(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire” (17 U.S.C. § 101). Work by an outside contractor that falls outside those categories needs a written assignment, not just the label.

The cheap fix

A flat-fee contract review before signing costs a small fraction of litigating any one of these clauses after the relationship sours. Bring the contract to the firm first. The consultation is free.

Related services: Business & Commercial Contracts · Outside General Counsel · Rockland County Business Litigation

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