Scope, Acceptance, and Change Control
Many service and development agreements define deliverables loosely and never establish how acceptance occurs. Without acceptance mechanics, invoices are disputed, timelines drift, and termination rights become ambiguous. The business consequence is cash-flow uncertainty and prolonged conflict about what was promised.
Define objective acceptance criteria, review windows, and default acceptance triggers if feedback is not timely. Pair this with a documented change-order process so expanded requests are priced and scheduled explicitly.
Liability, Indemnity, and Security Commitments
Unlimited liability language appears frequently in rushed enterprise deals and can erase unit economics when disputes arise. At the same time, some counterparties seek carve-outs that effectively bypass caps entirely.
Use a cap framework tied to contract value and risk profile. Ensure carve-outs are narrow, defined, and proportionate. Avoid hidden uncapped exposure through confidentiality, indemnity, or data provisions drafted too broadly.
Sales pressure can also lead to security promises that product teams are not ready to meet. Contracts should reflect actual controls and provide a pathway for agreed improvements.
Termination, Transition, and Precedence
Termination language is often one-sided or impractical. If a critical vendor relationship ends, can you recover data, source files, or transition support in time? Contracts should specify orderly exit obligations and handover standards.
Many organizations use layered contract stacks: MSA, order form, statement of work, security exhibit, and data addendum. Without precedence rules, conflicts are inevitable and often resolved against the party that drafted carelessly.
Key takeaways
- Clarity in scope and acceptance reduces payment disputes.
- Liability and indemnity provisions require deliberate calibration.
- Data and security terms must match operational reality.
- Contract stacks need explicit precedence rules.
General informational content only. Contract terms should be tailored to the relevant transaction, sector expectations, and governing law.