Most commercial disputes we encounter do not arise from poorly written contracts. They arise from contracts that were technically sound but left critical questions unanswered — because at the time of signing, no one wanted to slow things down.
After fifteen years of reviewing, drafting, and mediating disputes over commercial agreements, we see the same patterns. Three types of clauses consistently account for the majority of problems.
1. Termination Without Clarity
A contract that is easy to enter but unclear to exit will eventually become a dispute.
The issue is rarely whether termination is permitted — most agreements include a termination clause. The problem is how it works in practice. What constitutes a "material breach"? How much notice is required? What happens to ongoing obligations after termination?
When these questions are left vague, both parties read the same clause and reach different conclusions. By the time they realise this, the relationship has already deteriorated.
The fix is straightforward: define what triggers termination, specify the notice period and method, and address the consequences — including payment for work completed, return of materials, and survival of confidentiality obligations.
2. Dispute Resolution as an Afterthought
The dispute resolution clause is often the last section drafted and the first to cause problems.
A clause that simply states "disputes shall be resolved by arbitration" without specifying the institution, the seat, the number of arbitrators, the language of proceedings, or the applicable law leaves everything open to argument — at the exact moment when the parties are least willing to agree on anything.
Four decisions made during drafting can prevent months of procedural argument later: name the institution, specify the seat and language, state the number of arbitrators, and confirm the governing law.
3. Liability Without Boundaries
When a contract does not set clear limits on liability, both parties are exposed — but neither realises it until something goes wrong.
Unlimited liability sounds like strong protection for the aggrieved party. In practice, it often means that the performing party prices in additional risk from the outset, or walks away from the contract rather than face an uncapped claim.
Reasonable liability caps, exclusions for indirect or consequential damages, and clearly defined indemnification obligations create a framework that both parties can operate within. This does not weaken the contract — it makes it workable.
A Note on Prevention
These three issues share a common root: they are not mistakes of competence but of timing. Contracts are often finalised under commercial pressure, when both parties are focused on closing the deal rather than anticipating what might go wrong.
The cost of addressing these clauses properly during drafting is a fraction of what it costs to resolve them once a dispute has begun.