All questions Plain-English answer

What Are Red Flags in a Contract? The Top 10

Different contracts, same warning signs. Here are the 10 red flags that span every category.

1. 'Sole discretion' anywhere

The other side rewrites the rule later. Replace with 'reasonable.'

2. One-sided rights

Only they can terminate, assign, or amend. Push for mutual.

3. Uncapped indemnification

You pay their legal bills with no ceiling. Cap at fees paid; make it mutual.

4. Auto-renewal with no reminder

Miss the date, owe another year. Demand written reminder + cap on rate.

5. Forced arbitration with class waiver

Limits remedies and prevents joining other employees. Strike if you can.

6. Perpetual confidentiality

Lifetime gag. Cap at 2–5 years.

7. IP transfer before payment

You can deliver and never get paid. Tie transfer to final payment.

8. 'As reasonably requested'

Open-ended scope. Replace with a fixed deliverables list and change-order pricing.

9. Forfeiture of deposits / equity

Lose what you've earned on a technicality. Add explicit carve-outs.

10. Distant jurisdiction

Litigation in their state, on their dime. Negotiate your home state or a neutral one.

Run this against your contract

Upload the actual document and legaldecoder will flag every issue we just covered — in seconds, in plain English.

Related clause explainers

Related questions

Not legal advice. For informational purposes only.