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Understand Business Contracts Before You Sign

Choose your situation and review the clauses that usually cost money later.

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Pick your scenario

The fastest way to recognize risk is seeing the same clause that burned you before.

Before Signing a Contract

Focus: universal contract risks before commitment.

Typical traps: auto-renewal, unlimited liability, termination penalties.

If you are a freelancer or agency

Focus: scope, payment, IP ownership, and client control clauses.

Typical traps: IP transfer, late payment terms, one-sided termination.

If you run a small business

Focus: commitments that hit cash flow and personal exposure.

Typical traps: personal guarantees, rolling renewals, fee penalties.

If you manage vendors

Focus: service levels, liability balance, and exit terms.

Typical traps: auto-renewal, weak service credits, hidden lock-ins.

If you review investor agreements

Focus: dilution, control rights, and downside protection.

Typical traps: liquidation preferences, broad investor rights, IP transfer side effects.

Universal risk checklist

  • Auto-renewal traps: notice windows and lock-in periods.
  • Personal guarantee clauses: business debt exposure to founders/directors.
  • Unlimited liability: uncapped downside for common operational events.
  • Payment terms: delayed cash flow, harsh dispute windows, and hidden fees.
  • Termination penalties: large exit costs and restrictive termination conditions.
  • IP transfer: loss of ownership over work product, templates, or code.
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