Contract clauses you should never sign (or should handle with care)
A contract that looks standard is rarely neutral. Many clauses, especially when written in technical and apparently harmless language, can tie your hands, expose you to disproportionate penalties or take away essential rights.
Here are the 8 clauses you should always read twice before signing.
1. Total, unlimited exclusivity
What it looks like:
> “The Supplier undertakes to work exclusively for the Client for the entire term of the contract.”
Why it's risky:
If you are a freelancer or an SME, an absolute exclusivity clause stops you having other clients, even if the client only gives you 10 hours' work a month. The result is that you are tied in but don't earn enough.
What to ask for instead:
Exclusivity limited to the client's specific sector, with a guaranteed minimum number of hours or orders each month.
2. Disproportionate penalties with no cap
What it looks like:
> “For each day of delay in delivery, the Supplier shall pay a penalty of €5.000.”
Why it's risky:
Without a maximum (cap), the penalty can add up to more than the value of the contract itself. A 10-day delay on a €20.000 contract could cost you €50.000 in penalties.
What to ask for instead:
A reasonable daily penalty (1–2% of the order value) with a maximum cap (e.g. no more than 10% of the total price).
3. Automatic assignment of all intellectual property rights
What it looks like:
> “All rights, title and interest in the work performed are assigned to the Client from the date this contract is signed.”
Why it's risky:
If you're a creative, a developer or a consultant, this clause hands over your work (including code, designs, texts and methods) before you've even been paid. And it often includes earlier work that you've reused.
What to ask for instead:
Rights pass on payment in full; the Supplier keeps the right to use generic methods and tools; use in a portfolio is expressly allowed.
4. Foreign jurisdiction or unfavourable arbitration
What it looks like:
> “Disputes shall be settled exclusively by the Court of [foreign city] / by the arbitrator appointed by [the Client's organisation].”
Why it's risky:
A foreign jurisdiction means huge costs (travel, local lawyers) for any dispute, however small. An arbitrator appointed unilaterally by the client is not neutral.
What to ask for instead:
The courts of your home town or registered office, or arbitration with an arbitrator appointed by mutual agreement or by an independent institution (e.g. the Rome Chamber of Arbitration).
5. Automatic renewal without adequate notice
What it looks like:
> “The contract renews automatically for the same period unless notice of termination is sent at least 90 days before expiry.”
Why it's risky:
If you forget or don't read the clause, you find yourself tied in for another year. Combined with an exclusivity clause, the consequences can be serious.
What to ask for instead:
30 days' notice, with an obligation on the Client to remind you 30 days before the deadline for withdrawing.
6. Unlimited liability clause
What it looks like:
> “The Supplier shall be liable without limit for any direct, indirect or consequential damage caused by non-performance.”
Why it's risky:
Liability for consequential damage (the client's lost profits, lost opportunities, damage to third parties) can be devastating and impossible to estimate in advance. For a single freelancer or SME, one consequential claim can wipe out years of revenue.
What to ask for instead:
Liability limited to the value of the contract, with indirect damage expressly excluded.
7. Unilateral changes to the terms
What it looks like:
> “The Client reserves the right to change the terms of this agreement on 15 days' notice.”
Why it's risky:
It means the client can change prices, volumes, conditions and deadlines without your agreement. It's a typical clause used by digital platforms with their suppliers and partners.
What to ask for instead:
Any change requires the written agreement of both parties. If you don't accept, the contract continues on the original terms until it expires.
8. Unlimited post-contract non-compete obligation
What it looks like:
> “For 5 years after the relationship ends, the Supplier may not carry on competing activities in any sector.”
Why it's risky:
A non-compete that is too long, too broad or unpaid is disproportionate and, in many cases, void or open to reduction by the court. But in the meantime it “scares” you and holds you back.
What to ask for instead:
A maximum of 1–2 years; a specific sector limited to the client's business; payment in return for the restriction (required by case law when the restriction is significant).
What to do if the contract contains these clauses
– Don't sign straight away: ask for time to have the contract reviewed
– Propose changes in writing: any change must be accepted in writing, not verbally
– Weigh up the risk: some clauses are negotiable, others point to a client you'd be better off not working with
– Have the contract reviewed by a lawyer: the cost of a review is minimal compared with the risk of a harmful clause
The Legaless team can review your contract, highlight the risky clauses and suggest better solutions.
Frequently asked questions
Is a standard contract always valid?
Generally yes, unless it contains clauses that breach mandatory rules (e.g. unfair terms in B2C contracts such as those under art. 33 of the Italian Consumer Code) or that are void by law (e.g. disproportionate non-compete agreements). In B2B contracts between businesses, protection is weaker and it's important to negotiate knowingly.
Can I change a contract I've already signed?
Yes, with an addendum or an amending agreement signed by both parties. Verbal changes have no contractual value.
What happens if I sign a clause that is later declared void?
The void clause has no effect. The rest of the contract usually remains valid, unless the nullity affects an essential part.
This article is for general information purposes. Contract clauses must be assessed in their specific context by a lawyer.
