Red Flag Clauses You Keep Agreeing To (and Regret Later)

Red Flag Clauses You Keep Agreeing To (and Regret Later)

By Jesse David Eisenberg, Esq. | JDE Law Firm, PLLC

Contract regret is a silent epidemic in the business world. You’re moving fast, a deal looks good, and you assume the paperwork is just “standard.” But hidden deep in that fine print are clauses that have cost companies hundreds of thousands — or worse.

Let’s talk about three contract clauses that sophisticated businesses routinely agree to… and later wish they hadn’t.

1. Indemnification Without Limits

That single word — indemnify — should sound alarm bells. If your contract says you “indemnify and hold harmless” the other party without clear limits, you could be agreeing to pay their legal fees, settlement costs, or even damages if something goes wrong… even if you didn’t cause the problem.

Fix: Always require mutual indemnification and limit it to negligence or misconduct — not general operation.

2. Auto-Renewals That Trap You

Auto-renewals might seem harmless — until you’re locked into a high-cost vendor contract you can’t exit without paying penalties. Many contracts auto-renew unless you cancel within a narrow “window,” like 30–60 days before the renewal date.

Fix: Add a requirement that the other party notify you in writing before an auto-renewal kicks in. Better yet, strike the clause entirely.

3. One-Sided Termination Rights

Watch for clauses that give the other party the right to terminate “at any time, for any reason,” while locking you in without reciprocal rights. These provisions often show up in consulting agreements, vendor contracts, or subscription-based platforms.

Fix: Insert a mutual termination clause with a reasonable notice period (e.g., 30 days).

What Happens When You Miss a Clause?

Missing a red flag clause doesn’t just cause headaches — it can trigger litigation. Many of the commercial disputes we handle stem directly from one party’s failure to understand the obligations buried in these provisions.

If you’ve signed something you regret, or you’re currently being held to a bad deal, there are still legal options. Don’t assume a clause is enforceable just because it’s there. Let’s talk.

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