Most Indian founders know they need written contracts. Fewer realise that a contract's value lies almost entirely in the clauses you negotiated when the relationship was good — not the signature at the bottom. These are the seven provisions that consistently appear in Vilot-reviewed contracts as missing, vague or dangerously one-sided.
1. IP Assignment
The most important and most overlooked clause in any contract involving creative or technical work. Without an explicit intellectual property assignment clause, the IP created by a contractor, freelancer or even an employee may remain legally owned by the creator — not your company. This is especially critical for software, design work, content and brand assets. Every contract involving deliverables must contain an explicit assignment of all IP created under that contract to your company, with a representation that the creator has the right to make that assignment.
2. Limitation of Liability
Without a liability cap, your exposure in a contract dispute is theoretically unlimited. A well-drafted limitation of liability clause caps your counterparty's claims against you (and your claims against them) at a defined amount — typically the fees paid under the contract in the preceding 12 months. It also excludes categories of loss — indirect damages, consequential losses, loss of profit, loss of data — that would otherwise be claimable. This is standard practice in commercial contracts globally and widely enforceable in Indian courts.
3. Termination for Convenience
Most contracts specify termination only for breach. A termination for convenience clause allows either party to exit the contract without cause, typically with a defined notice period. Without it, you may be locked into a vendor, contractor or service provider relationship that has become unworkable, with no clean exit mechanism. Include a minimum notice period (typically 30–90 days) and specify what happens to payments, deliverables and IP on termination.
4. Governing Law and Jurisdiction
In any dispute, the first question is: which court, and under which law? Without a governing law clause, this becomes its own expensive sub-dispute. Specify the governing law (Indian law, typically) and the exclusive jurisdiction (the city/state of your choice). For B2B contracts, also consider including an arbitration clause — disputes resolved through arbitration are typically faster and less expensive than court litigation in India.
5. Confidentiality Survival Clause
Most contracts include confidentiality provisions. Many fail to specify how long those provisions survive after the contract ends. Without a survival clause, your confidentiality protection may terminate when the contract does — leaving you with no legal protection against disclosure of sensitive information by a departing contractor or former client. Best practice: confidentiality obligations should survive for at least 3–5 years post-termination.
6. Force Majeure (and its limits)
Force majeure clauses excuse non-performance during extraordinary events — pandemics, natural disasters, government orders. Post-2020, every founder has seen these clauses invoked. The issue is that many force majeure clauses are either too broad (covering routine supply chain issues) or too narrow (missing obvious events). Draft carefully: define the triggering events specifically, require prompt notice, and include a maximum suspension period after which either party can terminate.
7. Entire Agreement and Variation
A final clause that most founders overlook entirely: the entire agreement clause states that the written contract supersedes all prior conversations, emails, WhatsApp messages and verbal commitments. Combined with a variation clause (specifying that any amendment must be in writing and signed by both parties), it ensures that an email exchange or a verbal promise from your sales team cannot be used to alter your contractual obligations. In Indian litigation, the absence of these clauses regularly creates expensive disputes about what was actually agreed.