Commercial contracts are often negotiated under time pressure, so attention stays on price, delivery and commencement date. The clauses that matter most during a dispute may receive far less attention until something goes wrong.

A useful contract review looks at both sides of the relationship. It asks what the business expects when things work as planned and what should happen if performance, payment or trust breaks down.

1. Define the scope so performance can be measured

A contract should make it possible to tell whether the promised work was actually delivered. Vague references to “services as required” can create disputes over what was included, when it was due and what counts as completion.

Use schedules, specifications, milestones or acceptance criteria where the commercial arrangement requires them.

2. Link payment to clear triggers

State when invoices may be raised, what supporting documents are required, the payment period, tax treatment, consequences of disputed invoices and whether withholding or set off is permitted.

If there are advance payments, deposits, retention amounts or milestone payments, specify when they become refundable or not refundable.

3. Read indemnity and liability clauses together

An indemnity can allocate particular categories of loss while a limitation clause may cap or exclude liability. These clauses should be read together; changing one without reviewing the other can create unintended exposure.

Also check exclusions for indirect loss, carve outs for confidentiality or IP claims, and whether the cap is linked to fees, insurance or another amount.

4. Plan the exit before signing the entry

Termination rights should distinguish ordinary termination, termination for breach, insolvency or repeated failure. The contract should also address notice, cure periods, payments due on exit, return of property, data, confidentiality and transition obligations.

A termination clause that says nothing about after termination consequences may move the dispute rather than resolve it.

5. Do not leave dispute clauses until the end

Governing law, jurisdiction, arbitration, notice addresses and escalation procedures affect how a dispute must be handled. Boilerplate wording copied from another transaction may point to the wrong city, law or procedure.

Check whether any before a dispute negotiation or mediation step is mandatory and whether the arbitration appointment mechanism is workable.

Quick review checklist

The commercial team and legal document should tell the same story.

  • Scope, milestones and acceptance criteria.
  • Price, taxes, invoicing and payment triggers.
  • Warranties, indemnities and limitation of liability.
  • Confidentiality, data and intellectual property rights.
  • Termination and after termination obligations.
  • Governing law, notices and dispute resolution mechanism.

Reference framework

Legal framework referred to in this article

  • Indian Contract Act, 1872
  • Specific Relief Act, 1963 where relevant
  • Arbitration and Conciliation Act, 1996 where arbitration is chosen

Primary materials

This article summarises the legal and regulatory framework relevant to the topic. Later amendments, factual differences and applicable directions may affect the position.