A contract often seems standard — until something goes wrong. That is when the short, easily overlooked clauses turn out to be decisive. This guide shows, per contract type, where the risks lie and what to look out for before you sign.
Whether you have a supplier contract, a SaaS agreement or a freelance contract in front of you: most risks are not in complicated legal language, but in what is not arranged. Below you will first read the five points that deserve attention in virtually every business contract, and then the specific points of attention per common contract type.
In this guide
Regardless of the type of contract, five topics recur time and again as a source of problems. Whoever checks these five catches the majority of the risks.
The liability provision determines who bears the cost of damage if something goes wrong. Watch for a cap on damage claims: if it is missing, you are in theory exposed to unlimited risk. Also check whether the cap is reciprocal — does it apply to both parties, or only to you? One-sided liability limitations in favour of the other party are a common stumbling block.
Many contracts renew automatically if you do not cancel in time. Combine that with a long notice period, and you are tied in longer than intended. Check the start date, the term, the cancellation moment and the notice period — and note the latest date by which you must take action.
Who becomes the owner of what is created or collected under the contract? For software, content, designs and data this is crucial. Ambiguity here leads to conflicts on termination or when reusing results.
Is personal data exchanged? Then there must be data processing arrangements that comply with the GDPR. If they are missing or incomplete, you run a privacy risk for which you remain responsible.
Good arrangements make the end as clear as the beginning. Watch for costs on termination, return or deletion of data, and whether you can switch to another party without problems.
In addition to the five general points, each contract type has its own pitfalls. Below are the most common ones, with a concrete point of attention per type.
SaaS and software contract
In SaaS and licence agreements the supplier often limits its own liability extensively, while yours remains unlimited. What to look out for: is there a cap on damage claims, and does it apply reciprocally? Also watch for clauses on availability (SLA), data use and what happens to your data on termination.
What to look out for: is there a cap on damage claims, and does it apply reciprocally? Also watch for clauses on availability (SLA), data use and what happens to your data on termination.
Supplier contract
Supplier contracts often renew tacitly, sometimes with a notice period of several months. What to look out for: make the cancellation moment and the renewal conditions explicit, so you are not unintentionally tied to a supplier. Put the cancellation date in your calendar.
What to look out for: make the cancellation moment and the renewal conditions explicit, so you are not unintentionally tied to a supplier. Put the cancellation date in your calendar.
AI contract
With AI services it is often unclear who owns the output and whether your data may be used to train models. What to look out for: explicitly state who owns the output and how data may be used. Watch for clauses about model training with your data.
What to look out for: explicitly state who owns the output and how data may be used. Watch for clauses about model training with your data.
Freelance agreement
Unclear arrangements about the authority relationship and the actual collaboration can lead to false self-employment (DBA), with tax and employment-law consequences. What to look out for: pay attention to the authority relationship, the freedom in carrying out the work and the actual collaboration — not just what is on paper. When in doubt, additional tax advice is advisable.
What to look out for: pay attention to the authority relationship, the freedom in carrying out the work and the actual collaboration — not just what is on paper. When in doubt, additional tax advice is advisable.
Data processing agreement & GDPR
If personal data is processed, data processing arrangements are mandatory under the GDPR. If they are missing, you unintentionally run a privacy risk. What to look out for: check whether the data processing arrangements are present and complete — think of security, sub-processors, retention periods and data breaches.
What to look out for: check whether the data processing arrangements are present and complete — think of security, sub-processors, retention periods and data breaches.
General
Many contracts lack clear arrangements about ownership of software, content or data, and about the costs of termination or switching. What to look out for: make sure ownership and exit conditions are explicitly set down, so that switching later does not become unnecessarily expensive or complicated.
What to look out for: make sure ownership and exit conditions are explicitly set down, so that switching later does not become unnecessarily expensive or complicated.
Not every contract requires a full legal review. For a short, standard agreement with limited stakes, careful reading yourself is often enough. A review becomes more valuable as more is at stake: a longer term, a high financial interest, recurring obligations or sensitive data.
The difference between reading it yourself and having it reviewed lies mainly in the blind spots. Reading it yourself helps you understand the arrangements that are there. A targeted review looks precisely at what is not there — the missing liability cap, the tacit renewal, the unclear ownership — and weighs that against your commercial interest.
With the Contract Risk Scan you receive a compact risk analysis of one contract: the most important legal and commercial points of attention, with concrete recommendations. AI accelerates the preparation, an experienced legal professional reviews the result.
View the Contract Risk Scan →What are the most important points to check in a contract?
The five most underestimated points are: the liability provision (is there a cap and does it apply mutually?), the term and notice period (is there automatic renewal?), ownership of results and data, confidentiality and privacy (is a data processing agreement required?), and exit arrangements on termination.
Do I need to have every contract legally reviewed?
Not every contract requires a full review. For short, standard agreements with limited stakes, reading carefully yourself is often enough. A review becomes more valuable as the term, financial interest or sensitivity of the data increases.
What is the difference between reading a contract yourself and having it reviewed?
Reading it yourself helps you understand the arrangements, but risks often lie in what is not there: a missing liability cap, a tacit renewal or unclear ownership of results. A targeted review looks precisely at those blind spots and weighs them against your commercial interest. For your specific situation, an individual assessment is always necessary.
This guide provides general information and does not constitute legal advice. Axi Legal is not a law firm. An individual assessment is always required for your specific situation.