Adversarial Contract Review

This contract is heavily skewed against the contractor with multiple exploitative clauses. Here's my analysis:

MAJOR PROBLEMATIC CLAUSES

1. SCOPE (Unlimited Scope Creep)

Problem: Client can modify scope "at any time without additional compensation" Legal Risk: Contractor could work indefinitely for fixed hourly rate regardless of scope expansion

Suggested Fix:

"Material scope changes exceeding 20% of original project estimate require written agreement and adjustment to timeline/compensation. Minor modifications may be accommodated within existing scope."

2. PAYMENT (Predatory Payment Terms)

Problems:

• 90-day payment terms (industry standard is 30 days)
• "Unsatisfactory" withholding at client's "sole discretion"

Legal Risk: Client can indefinitely withhold payment without objective criteria

Suggested Fix:

"Payment due within 30 days of invoice. Client may only withhold payment for deliverables that objectively fail to meet written specifications. Disputed amounts must be identified in writing within 10 days."

3. INTELLECTUAL PROPERTY (IP Grab)

Problem: Claims contractor's pre-existing IP and all methodologies Legal Risk: Could lose valuable proprietary tools/methods developed before engagement

Suggested Fix:

"Client owns work product created specifically for this project. Contractor retains all pre-existing IP, general methodologies, and tools. Contractor grants Client license to use pre-existing IP incorporated in deliverables."

4. NON-COMPETE (Likely Unenforceable but Risky)

Problem: 24-month industry-wide restriction Legal Risk: Could prevent contractor from earning livelihood

Suggested Fix:

"Contractor agrees not to work directly with Client's customers on competing projects for 6 months, limited to projects substantially similar to work performed under this agreement."

5. TERMINATION (Asymmetric Terms)

Problem: Client can terminate instantly; contractor needs 60 days notice Legal Risk: Immediate income loss with no reciprocal protection

Suggested Fix:

"Either party may terminate with 30 days written notice. For immediate termination, Client must pay contractor for all completed work plus 30 days additional compensation."

6. LIABILITY (Unlimited Exposure)

Problem: No liability cap and includes consequential damages Legal Risk: Contractor could face bankruptcy from unlimited damages

Suggested Fix:

"Contractor's liability is limited to amount paid under this agreement in the 12 months preceding the claim. Excludes consequential damages. Client maintains appropriate insurance for business operations."

7. INDEMNIFICATION (Blanket Protection)

Problem: Contractor indemnifies "regardless of fault" Legal Risk: Must defend client even for client's own mistakes

Suggested Fix:

"Contractor shall indemnify Client only for claims directly resulting from Contractor's negligent acts or willful misconduct, excluding claims arising from Client's modifications or misuse of deliverables."

ADDITIONAL RECOMMENDED ADDITIONS

Force Majeure Clause

"Neither party shall be liable for delays caused by circumstances beyond their reasonable control, including natural disasters, government actions, or pandemics."

Governing Law

"This agreement shall be governed by [Contractor's state] law, with disputes resolved in [neutral jurisdiction] courts."

Severability

"If any provision is deemed unenforceable, the remainder of the agreement shall remain in effect."

LEGAL REASONING

1. Unconscionability Doctrine: Courts may void contracts with extremely unfair terms
2. Mutuality: Contracts should have reasonable reciprocal obligations
3. Industry Standards: Deviations from standard practices may indicate exploitation
4. Restraint of Trade: Overly broad non-competes violate public policy
5. Good Faith Dealing: Implied covenant requires fair dealing in contract performance

RECOMMENDATION

This contract should be substantially rewritten before signing. Consider engaging a contract attorney, as the current terms create significant financial and legal risks that could exceed the engagement's value.