Contract red flags: 10 warning signs to watch for in any agreement

Not every problematic contract is obviously bad. Some are carefully drafted to look reasonable while hiding significant risks in the details. Here are 10 red flags that should make you read more carefully before signing.

1. One-sided termination rights

They can terminate at any time with 7 days notice. You can only terminate for cause with 90 days notice. This asymmetry puts all the power on one side.

2. Unlimited indemnity with no cap

You agree to indemnify them for "any and all losses" arising from your work — without any financial cap. This could expose you to claims far exceeding your fee.

3. Automatic renewal with short cancellation windows

The contract auto-renews annually unless you cancel within a 15-day window three months before the renewal date. Miss it and you are locked in for another year.

4. All IP assignment — including side projects

All intellectual property you create "during the term of employment" belongs to the employer — not just work done for them, but anything you create, including personal projects.

5. Vague scope of work

"The Contractor shall perform all services as reasonably requested by the Client." This gives the client unlimited scope to add work without additional compensation.

6. Payment on acceptance with no acceptance timeline

Payment is due "upon acceptance of deliverables" but there is no deadline for the client to accept or reject. They can delay payment indefinitely.

7. Non-compete without compensation

You cannot work for competitors for 12 months after leaving — but the employer offers no compensation for this restriction. In many European jurisdictions this makes the clause void.

8. Governing law in a distant jurisdiction

You work in France, the client is in Germany, but the contract says disputes are governed by the laws of Delaware. This makes enforcement impractical and expensive.

9. Confidentiality that covers everything

"All information disclosed during the relationship is confidential." This could prevent you from using general knowledge, discussing your experience, or even mentioning the client's name.

10. No limitation period for claims

The contract does not specify a time limit for bringing claims. Without one, the other party could sue you years after the contract ended for issues you have long forgotten about.