What Are the Most Requested Terms in Business Contracts?
Business contracts can be complex and confusing. By studying real client project data on our platform, ContractsCounsel, our team has found that clients frequently request specific clauses when hiring lawyers to draft their business contracts.
These include:
- Payment schedules
- Late fees and deposits
- Contract duration and termination periods
- Confidentiality
- Intellectual property and non-solicitation clauses
- Indemnity and limitation of liability
- Scope and performance milestones
- Dispute resolution procedures
- Warranties and guarantees
- Unforeseen changes or cancellations
These terms are the biggest priorities businesses have when customizing agreements to fit their needs. Read on to learn more about them.
Note: This analysis comes from thousands of anonymized business contract postings on ContractsCounsel’s platform.
1. Payment Schedules and Deposits
Clients want payment clarity. When invoices or deposits are due should be clear.There should be guidelines for how late fees are handled, helping with cash flow and preventing nonpayment.
Takeaway: The contract should spell out payment timing and rules or penalties if payment is late. Everyone should know how and when payments need to be made.
2. Contract Duration and Termination
Businesses need to know how long a contract will last. If they have to terminate the contract early, this should be possible. We’ve found a common drafting request includes fixed terms with renewal options, as well as specific notice periods for termination.
Takeaway: Clearly state the contract term and termination conditions clearly.
3. Confidentiality, Intellectual Property, and Non-Solicitation
Clients usually ask that lawyers help them with confidentiality clauses. They want to protect sensitive business information. IP ownership clauses clearly state which party owns deliverables. Non-solicitation terms are needed to prevent poaching of clients and staff.
Takeaway: You can protect your proprietary information by ensuring your contract contains these important terms, thereby avoiding disputes or losses in the future.
4. Indemnity and Limitation of Liability
People want contracts to explain who pays if a mistake happens or someone loses money. Clients request the chance to cap potential damages and allocate responsibility if something goes wrong, such as losses, errors, or third-party claims.
Takeaway: Team up with your lawyer, who can help you set fair and legal limits so that the terms are aligned with your business risks and goals.
5. Scope of Services and Performance Milestones
Contracts should explain what work will be done. There should be details regarding what needs to be delivered, and by when, so that everyone is aware of what's expected of them.
Takeaway: The contract should be specific and clear about deadlines for all parties involved.
6. Dispute Resolution Procedures
If people disagree, it’s good to have a plan to fix things quickly. Some contracts use mediation or arbitration clauses so both sides can solve problems without going to court.
Takeaway: A mediation or arbitration clause is essential should disputes crop up. They reduce the time and costs involved, which can be stressful, as well as preserve business relationships.
7. Warranties, Guarantees, and Quality Control
Contracts might include promises, called warranties or guarantees. These state that the product or service will meet a certain standard and are regularly requested by clients to ensure service and performance.
Takeaway: These clauses need to be clear and quantifiable — an experienced lawyer can help to ensure this.
8. Unforeseen Circumstances and Cancellations
Big events can take you by surprise. You need your contract to state what happens if something occurs, such as a natural disaster or other business problem. There must be a process outlined for force majeure events, including early termination and scope changes.
Takeaway: You and your lawyer should try to predict future disruptions. The contract should include flexible clauses so that changes can occur without complications.
Why This Matters
Clients want contracts with clarity, balance, and specificity, as our data shows, to reduce ambiguity and disputes, and maintain business relationships.
Get Help With Your Business Contract
If you need a business contract created or reviewed, post your project on ContractsCounsel. Get matched with licensed attorneys who will customize the agreement to meet your company’s needs.
