Read This Before You Sign: Contract Traps That Sink Small Businesses

You don’t lose a contract fight on the day of the dispute, you lose it at signature. The harsh truth is that most agreements are engineered to protect the drafter, not you. One clause can flip your leverage, drain cash flow, and punch through your LLC shield. Before you click “accept,” slow down and look for the pressure points that routinely bury otherwise healthy companies.

Personal guarantees are the silent wrecking ball. Hidden in addenda or credit forms, they can make you personally liable for a corporate obligation. If the deal goes sideways, the other side comes after your bank account, not just the business. Next, scan for one-sided indemnity provisions that make you pay for the other party’s mistakes, and fee-shifting clauses that force you to fund their lawyers if you don’t prevail.

Watch for auto-renewals and punitive early-termination fees that lock you into bad terms for years. Pair that with out-of-state venue or mandatory arbitration and you’ve got a dispute you can’t afford to fight. Vague scopes of work, fuzzy milestones, and slippery change, order language are dispute factories; they invite scope creep, delay, and nonpayment.

Don’t ignore IP and data clauses. ‘Work made for hire’ and broad license grants can transfer your brand, code, or creative. Overreaching NDAs and non-competes can block deals or hiring. Payment clauses matter: net-45 that turns net-90, pay-when-paid, holdback/retainage, and vague acceptance criteria starve cash flow and turn a good project into a collection problem.

Already in a standoff? Every day you wait costs leverage. Demand letters escalate by design, deadlines pass quietly, and sloppy email replies become exhibits later. The fastest way to protect yourself is a focused risk review, a written plan, and disciplined communications that move the other side without inflaming the situation.

Typical early actions include: a flat-fee contract review with blunt, written risk notes and proposed redlines; targeted negotiation to rebalance indemnity, IP, payment triggers, and termination; and dispute positioning for breach, scope creep, or nonpayment. When action is unavoidable, we prepare demand letters that create consequences or draft pleadings to control the first impression in court.

Here’s how to cut risk quickly:

1. Schedule a consultation to scope your matter and next steps.

2. Send the contract and any deadlines.

3. Decide whether to engage Brinkley Law to review, negotiate, or act.

   
   

Waiting is a decision. Bad terms harden with time, not kindness. If you’re in Indiana and a contract is on your desk or a dispute is already in your inbox, get proactive counsel before a signature or a silence turns into liability you can’t undo.

Call Brinkley Law today to schedule a consultation 317-766-1379.