Gan Li Li
Legal Associate
A good contract is not about distrust — it is about clarity. These seven clauses prevent the disputes that derail commercial relationships.
Most commercial disputes are not caused by bad faith — they are caused by silence. The parties never agreed what would happen if a deadline slipped, a payment was late, or the relationship ended. A well-drafted contract answers those questions in advance.
1. Scope and deliverables
Define precisely what each party must do, by when, and to what standard. Vague scope is the single most common source of dispute.
2. Payment terms
State amounts, milestones, due dates, late-payment interest and the consequences of non-payment. Cashflow problems become legal problems without this.
3. Term and termination
Set out how long the contract runs and how either side can exit — for convenience, for breach, or on insolvency — together with notice periods.
4. Limitation of liability
Cap exposure and exclude indirect or consequential losses where appropriate. Uncapped liability can dwarf the value of the deal itself.
5. Confidentiality and IP
- Who owns IP created under the contract?
- What information is confidential, and for how long?
- Are there licences back to either party?
6. Dispute resolution and governing law
Choose the governing law and a forum — courts or arbitration — and consider a tiered clause requiring negotiation or mediation first.
7. Force majeure
Allocate the risk of events outside the parties' control. Recent years have shown how quickly the unforeseeable becomes real.
The cheapest dispute to resolve is the one your contract already answered.
This article is general information, not legal advice. For guidance on your specific situation, please speak to our team.
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