Great prompt. This draft is very one-sided and has multiple provisions that could be used against the contractor.

Quick note: I’m not a lawyer, and enforceability depends on jurisdiction. This is practical contract-risk spotting, not legal advice.

High-risk clauses and better alternatives

1) Scope (unilateral scope changes, no extra pay)

Current risk:
“Client reserves the right to modify the scope at any time without additional compensation.”

How it can be exploited:

• Client can continuously add work (“scope creep”) while keeping hourly rate and timeline unchanged.
• Contractor has no contractual basis to refuse additional tasks or renegotiate deadlines/budget.

Suggested modification:

• Add a change order mechanism: any material change in scope, timeline, or deliverables requires written agreement and may adjust fees/schedule.
• Clarify priorities and acceptance criteria.

Sample language:
“Any material change to scope, deliverables, assumptions, or timeline must be documented in a written change order signed by both parties. Contractor will be compensated at the agreed rate for additional work.”

Legal reasoning:
Avoids illusory obligations and ambiguity; creates objective, enforceable process for expanded work.

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2) Payment (90-day terms + subjective withholding)

Current risk:

• Net 90 is cash-flow hostile.
• “Unsatisfactory” at Client’s sole discretion is subjective and easy to abuse.

How exploited:

• Client can delay payment for months.
• Client can reject work without objective criteria and withhold large sums.

Suggested modification:

• Move to Net 15/30.
• Require written dispute notice within a short window (e.g., 10 business days).
• Only undisputed amounts can’t be withheld.
• Add late fee/interest and suspension rights for nonpayment.

Sample language:
“Invoices are due within 15 days. Client must notify Contractor in writing of any disputed amounts within 10 business days, with reasonable detail. Client shall timely pay all undisputed amounts. Late payments accrue interest at 1.0–1.5% per month (or maximum lawful rate). Contractor may suspend services for nonpayment after 10 days’ notice.”

Legal reasoning:
Creates objective payment obligations and limits bad-faith withholding.

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3) IP (overbroad assignment incl. pre-existing IP)

Current risk:
“All work product… including work created using Contractor’s pre-existing IP” belongs exclusively to Client.

How exploited:

• Contractor could unintentionally transfer ownership of their own frameworks, templates, tools, libraries, know-how.
• Could prevent contractor from reusing general methods in future projects.

Suggested modification:

• Distinguish:
  1. Project deliverables (assigned to Client upon full payment), vs.
  2. Background IP (contractor retains ownership).
• Grant Client a broad license to any contractor background IP embedded in deliverables.

Sample language:
“Contractor retains all right, title, and interest in pre-existing and independently developed tools, libraries, methodologies, and know-how (‘Background IP’). Upon full payment, Contractor assigns to Client all right, title, and interest in the specific deliverables created under this Agreement, excluding Background IP. Contractor grants Client a perpetual, worldwide, non-exclusive, royalty-free license to use any embedded Background IP solely as incorporated in the deliverables.”

Legal reasoning:
Standard IP carve-out protects contractor’s core assets while giving Client practical usage rights.

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4) Non-compete (overbroad duration/scope)

Current risk:
No “similar services” to any company in same industry for 24 months.

How exploited:

• Could block contractor from earning income in a whole vertical for 2 years.
• Often unenforceable or partially enforceable depending on jurisdiction, but still costly to litigate.

Suggested modification:

• Replace with non-solicit + confidentiality, not broad non-compete.
• If a non-compete remains: narrow to specific named competitors, geography, and 3–6 months maximum.

Sample language:
“Contractor will not use Client Confidential Information to compete unfairly and will not solicit Client employees or customers introduced through this engagement for 12 months. No broad industry-wide non-compete applies.”

Legal reasoning:
Courts scrutinize restraints on trade; narrow restrictions tied to legitimate business interests are more defensible.

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5) Termination (asymmetric + uncompensated handover)

Current risk:

• Client can terminate anytime without notice; contractor must give 60 days.
• Must deliver all WIP without extra compensation.

How exploited:

• Client can terminate right before milestone/payment, demand unfinished work, and avoid further payment.
• Contractor is locked in while client is free to exit instantly.

Suggested modification:

• Mutual termination rights (e.g., 15–30 days’ notice for convenience).
• Immediate termination only for material breach with cure period (except severe breaches).
• Pay for all work performed through termination + agreed transition assistance at standard rate.

Sample language:
“Either party may terminate for convenience with 15 days’ written notice. Either party may terminate for material breach if uncured after 10 days’ notice. Client shall pay Contractor for all services performed and approved expenses incurred through termination date. Any transition assistance will be billed at the then-current rate.”

Legal reasoning:
Prevents unjust enrichment and improves reciprocity/fair dealing.

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6) Liability (unlimited incl. consequential damages)

Current risk:
Contractor bears unlimited liability for bugs/security/system failures, including consequential damages.

How exploited:

• A single outage could create catastrophic exposure (lost profits, reputational damages, downstream claims).
• Contractor effectively becomes insurer for all business risk.

Suggested modification:

• Exclude consequential/special/indirect damages.
• Cap total liability (commonly fees paid or 1–2x fees).
• Carve out exceptions only for willful misconduct, fraud, IP infringement, or confidentiality breach as negotiated.

Sample language:
“Except for willful misconduct, fraud, or each party’s indemnification obligations, neither party is liable for indirect, incidental, special, consequential, or punitive damages. Contractor’s aggregate liability shall not exceed the total fees paid or payable under this Agreement in the 12 months preceding the claim.”

Legal reasoning:
Risk allocation must be commercially reasonable and insurable.

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7) Indemnification (one-way, regardless of fault)

Current risk:
Contractor indemnifies Client against all claims “regardless of fault.”

How exploited:

• Contractor could pay for claims caused by Client’s misuse, specs, instructions, or third-party components chosen by Client.
• No duty on Client to mitigate or tender defense properly.

Suggested modification:

• Limit indemnity to third-party claims arising from contractor’s negligence, willful misconduct, or IP infringement in deliverables.
• Exclude claims caused by Client modifications/instructions/combinations.
• Make indemnity mutual where appropriate.

Sample language:
“Contractor will indemnify Client from third-party claims to the extent caused by Contractor’s gross negligence, willful misconduct, or infringement by deliverables as provided. Client will indemnify Contractor for claims arising from Client-provided materials, specifications, unlawful instructions, or Client’s modifications/use outside intended scope.”

Legal reasoning:
Indemnity should track fault and control; “regardless of fault” is unusually harsh and potentially unconscionable.

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8) Confidentiality (overbroad gag incl. agreement terms)

Current risk:
Cannot disclose anything about engagement, including contract terms, for 5 years.

How exploited:

• Could prevent contractor from basic business/legal disclosures (to accountants, insurers, lawyers, subcontractors under NDA).
• Could impede required legal reporting or portfolio use of non-sensitive facts.

Suggested modification:

• Keep confidentiality, but add standard exceptions: already known/public, independently developed, required by law/court, disclosures to professional advisors under duty of confidentiality.
• Optional: permit listing Client name/logo subject to prior consent.

Sample language:
“Confidentiality obligations shall not apply to information that is public through no fault of recipient, already known, independently developed, or rightfully received from a third party. Contractor may disclose Confidential Information as required by law, and to legal/financial advisors under confidentiality duties. This clause survives 3–5 years; trade secrets remain protected as long as legally protected.”

Legal reasoning:
Maintains protection while preserving lawful/operational disclosures.

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9) Dispute resolution (home forum + loser pays)

Current risk:
Arbitration in Client’s home jurisdiction; loser pays all costs.

How exploited:

• Forum advantage to Client and higher defense burden for contractor.
• “Loser pays” can chill valid claims by smaller party due to fee risk.

Suggested modification:

• Neutral venue or remote arbitration.
• Split administrative costs initially; fee shifting only by arbitrator for bad-faith or per law.
• Add governing law clarity and pre-arbitration negotiation/mediation step.

Sample language:
“Disputes will be resolved by binding arbitration under [AAA/JAMS] rules in a mutually agreed neutral venue (or remotely). Each party bears its own attorney fees unless arbitrator awards fees for bad-faith conduct or as required by law. Parties will attempt good-faith negotiation for 30 days before filing.”

Legal reasoning:
Reduces procedural unfairness and access-to-justice barriers.

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Additional protections to add (missing entirely)

1. Acceptance criteria for deliverables (objective test + deemed acceptance after X days).
2. Warranty limits (e.g., 30–90 day bug-fix window; no guarantee of uninterrupted/error-free operation).
3. Independent contractor status + tax responsibility clarification.
4. Force majeure.
5. Non-exclusivity (contractor free to serve other clients absent conflicts).
6. Expense reimbursement terms (pre-approved expenses payable).
7. Audit trail / written instructions requirement for major technical decisions.

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If you want, I can produce a clean revised contractor-friendly version of this entire agreement, or a balanced redline that is more likely to be accepted by a corporate client.