Contracts are made of recurring clauses with intimidating names. Once you can read them, every agreement gets easier. This library decodes the 30 clauses you'll meet most often: what each does, the trap version vs. the fair version, and a sample of fair language you can ask for. Keep it open while you review your next contract — it's a translator and a redline kit in one.
How to read each entry
- What it does — the clause's job in one line.
- Trap version — the language that quietly favors the other side.
- Fair version — what balanced looks like, with sample wording.
Core commercial clauses
1. Limitation of Liability
What it does: Caps how much each side can owe if things go wrong. Trap version: Caps your exposure at one month's fees, or excludes the things most likely to fail (data, IP). Fair version: "Neither party's aggregate liability shall exceed the fees paid in the twelve (12) months preceding the claim, except for breaches of confidentiality, indemnification obligations, and IP infringement, which shall be uncapped."
2. Indemnification
What it does: One party agrees to cover the other's losses from certain claims. Trap version: You indemnify them broadly and without limit; they indemnify you for nothing. Fair version: Mutual indemnities, each limited to claims arising from that party's own breach, negligence, or IP.
3. Warranties
What it does: Promises about the product, service, or party. Trap version: "AS IS, no warranties of any kind." Fair version: "Provider warrants the Services will perform materially in accordance with the Documentation; as Customer's sole remedy, Provider will repair, replace, or refund."
4. Term & Renewal
What it does: Sets how long the contract lasts and whether it renews. Trap version: Auto-renews with a 90-day cancellation window only. Fair version: "After the Initial Term, this Agreement renews monthly unless either party gives thirty (30) days' notice."
5. Termination for Convenience
What it does: Lets a party exit without a reason, on notice. Trap version: Only one party gets this right. Fair version: "Either party may terminate for convenience on sixty (60) days' written notice; prepaid, unused fees will be refunded pro-rata."
6. Termination for Cause
What it does: Lets a party exit when the other breaks the deal. Trap version: No cure period, or "cause" is undefined. Fair version: "Either party may terminate for material breach not cured within thirty (30) days of written notice."
7. Payment Terms
What it does: Sets when and how money is paid. Trap version: Net 7 with heavy late fees; or auto-charge with no notice. Fair version: "Invoices are due Net 30. Late amounts accrue interest at 1% per month or the legal maximum, whichever is lower."
8. Price Increases
What it does: Governs whether and how prices can rise. Trap version: "Fees subject to change at Provider's discretion." Fair version: "Fees may increase at renewal by no more than the greater of 5% or CPI, on sixty (60) days' notice."
9. Service Level Agreement (SLA)
What it does: Promises a performance standard (e.g., uptime).
Trap version: 99.9% uptime with a token 5% credit as the "sole remedy."
Fair version: Escalating service credits and a termination right if the SLA is missed in [N] consecutive months.
10. Acceptance
What it does: Defines how you approve delivered work. Trap version: Deemed accepted automatically after a few days of silence. Fair version: "Deliverables are accepted upon Customer's written approval, not to be unreasonably withheld, within fifteen (15) business days of delivery."
Data, IP & confidentiality clauses
11. Intellectual Property Ownership
What it does: Says who owns the work, product, or improvements. Trap version: Vendor owns custom work you paid for. Fair version: "All deliverables created specifically for Customer are assigned to Customer upon payment; Provider retains its pre-existing IP."
12. License Grant
What it does: Defines what you're allowed to do with licensed material. Trap version: Narrow, revocable, non-transferable, term-limited without notice. Fair version: A license scope (users, sites, duration) that matches what you actually need, surviving the way you expect.
13. Confidentiality
What it does: Keeps shared information secret. Trap version: Obligations expire in 6 months; "Confidential Information" is defined so narrowly it protects little. Fair version: Reasonable survival (2–5 years), indefinite for trade secrets, with the standard public/known/independent exclusions.
14. Data Protection / GDPR
What it does: Governs personal data handling. Trap version: No DPA; vague rights to "use data to improve services." Fair version: A signed Data Processing Agreement, named sub-processors with approval rights, and clear storage locations.
15. Data Return & Deletion
What it does: Says what happens to your data at the end. Trap version: Silent, or allows indefinite retention. Fair version: "On termination, Provider will return Customer Data in a standard format and delete remaining copies within thirty (30) days."
16. Feedback License
What it does: Governs ideas/suggestions you give. Trap version: "Perpetual, irrevocable, royalty-free license to all feedback." Fair version: Limit to the specific product, or strike for sensitive input.
17. Publicity
What it does: Whether they can use your name/logo. Trap version: They can publicize the relationship freely. Fair version: "Neither party will use the other's name or marks without prior written consent."
Dispute & boilerplate clauses
18. Governing Law
What it does: Picks which jurisdiction's law applies. Trap version: A distant jurisdiction with no connection to you. Fair version: Your jurisdiction, or a neutral one accessible to both.
19. Venue / Jurisdiction
What it does: Where disputes are physically heard. Trap version: Exclusive venue thousands of miles away. Fair version: A venue both parties can realistically reach, or arbitration seated neutrally.
20. Arbitration
What it does: Routes disputes to a private arbitrator instead of court. Trap version: Mandatory individual arbitration plus a class-action waiver. Fair version: Mutual arbitration with a small-claims-court carve-out and reasonable cost-sharing.
21. Force Majeure
What it does: Excuses performance during uncontrollable events. Trap version: Only "acts of God," excusing only them. Fair version: Mutual, covering pandemics, cyberattacks, and supply-chain failures, with a termination right if it drags on.
22. Assignment
What it does: Whether the contract can be transferred. Trap version: They may assign freely — even to a competitor. Fair version: "Neither party may assign without the other's consent, except to a successor in a merger or sale of all assets."
23. Amendment
What it does: How the contract can be changed. Trap version: "We may modify these terms at any time by posting an update." Fair version: "This Agreement may be amended only by a writing signed by both parties."
24. Entire Agreement
What it does: Says this document is the whole deal. Trap version: Erases every promise made in sales emails. Fair version: Keep it — but first get key promises written into the contract or an attached order form.
25. Severability
What it does: Keeps the contract alive if one clause is struck down. Trap version: Rarely abused, but watch for "the rest survives" paired with a one-sided clause. Fair version: "If any provision is unenforceable, the remainder stays in effect and the provision is modified to the minimum extent necessary."
26. Waiver
What it does: Says not enforcing a right once doesn't waive it forever. Trap version: Generally fair; just confirm it's mutual. Fair version: "No failure to enforce any provision constitutes a waiver of that or any other provision."
27. Notices
What it does: How official communications must be sent. Trap version: Requires postal mail to an address that's hard to use, so your termination "doesn't count." Fair version: Allows email to a named address with confirmation, alongside post.
28. Survival
What it does: Lists which clauses outlive termination. Trap version: Survives obligations that benefit only them. Fair version: Confidentiality, payment for work done, liability limits, and dispute terms survive — mutually.
29. Counterparts / E-Signature
What it does: Allows signing in separate copies, electronically. Trap version: Rarely an issue; just ensure e-signatures are accepted. Fair version: "This Agreement may be executed in counterparts and by electronic signature, each deemed an original."
30. Order of Precedence
What it does: Decides which document wins when attachments conflict. Trap version: The terms most favorable to them always win. Fair version: A clear hierarchy — usually the signed order form/SOW prevails over standard terms on conflicting points.
Keep this library, then let Attorly apply it
Memorizing thirty clauses takes time. Applying them to a 50-page contract under deadline pressure is where mistakes happen. Attorly — the AI Legal Document Assistant at attorly.ai — recognizes every clause in this library inside your actual document, tells you whether it's the trap version or the fair version, and drafts the redline for you.
Use this library to learn the language of contracts. Use Attorly to negotiate from a position of strength on every deal. Start a 7-day trial (card required) at attorly.ai.