The Contract Clauses Every Startup Should Actually Negotiate
Founders read the price and the deliverables. The clauses that actually determine risk are usually the ones nobody negotiates.
Most founders read a contract for two things: what they're getting, and what they're paying. The clauses that decide what happens when a deal goes wrong - which is where the real financial exposure sits - get far less attention. A few of these come up in almost every commercial contract, and are worth negotiating every time.
Limitation of liability
This clause caps how much either side can be made to pay if something goes wrong. An uncapped liability clause, or one capped far above the contract value, can expose a startup to losses well beyond what the deal was ever worth. Negotiating a liability cap tied to fees paid is one of the highest-leverage changes available in most contracts.
Indemnity
Indemnity clauses decide who bears the cost if a third party sues over the deal - a customer, a regulator, another vendor. Broad, one-sided indemnity language is common in first drafts and rarely favors the smaller party by default. It's worth checking whether indemnity obligations are mutual, and whether they're capped in line with the liability clause.
Termination rights
How easily can either side exit the contract, and what happens to fees, data, and deliverables on exit? Termination-for-convenience clauses that only favor one party, or notice periods that are too short to transition away from a vendor safely, are common and negotiable.
IP ownership
For any contract involving custom development, content, or data, ownership of the resulting intellectual property should be explicit. Ambiguous IP clauses have derailed fundraising due diligence for startups that assumed they owned work they never actually secured rights to.
Why this matters more at the startup stage
Larger companies can usually absorb an unfavorable clause; a startup often can't. These four clauses are where RVCo's Contract Management and Negotiation practice spends the most time on early-stage deals - not because they're unusual, but because they're the ones most often signed without a second look.