5 Contract Clauses Every Founder Should Understand Before Signing

Most founders read the commercial terms of a contract closely and skim the rest. The trouble is that the clauses you skim are usually the ones that decide what happens when things go wrong.

Limitation of liability

This clause caps how much either side can recover if the deal goes badly. Check whether the cap is tied to fees paid, whether it is mutual, and which claims sit outside it — confidentiality and IP breaches often do.

Termination and renewal

Auto-renewal windows, notice periods, and termination for convenience determine how easily you can exit. A thirty-day notice period buried on page nine can lock you into another year.

Assignment, IP, and governing law

Assignment rules matter the moment you raise money or get acquired. IP clauses decide who owns what you build together, and governing law decides where — and how expensively — any dispute will be fought.