Most vendor contracts we are asked to review after something has gone wrong have the same gap: they cover what each side will deliver and what it costs, and stop there. The clauses that actually matter in a dispute are usually the ones nobody thought to negotiate up front. Here are five that come up again and again.
1. Payment terms, precisely
"Payment within 30 days" sounds precise but rarely is - 30 days from invoice date, delivery date, or acceptance? Is there a late-payment interest rate, and does it compound? Vague payment terms are the single most common source of the disputes we see, largely because both sides assumed the other meant the same thing.
2. Termination and exit
Founders negotiate hard on what happens if the relationship works, and almost never on what happens if it does not. A workable termination clause specifies notice periods, what counts as a curable versus incurable breach, and - critically - what happens to work in progress, deposits, and any data or materials exchanged, once the relationship ends.
3. Indemnity
An indemnity clause decides who bears the cost when a third party's claim arises out of the vendor relationship - a defective product, an IP infringement, a data breach caused by the vendor's system. Without one, that risk defaults to wherever general law places it, which is often not where either party expected or wanted it to sit.
4. IP assignment and ownership
If a vendor builds something - code, a design, marketing material, a report - who owns it once payment is made? Absent an explicit assignment clause, the default position under Indian law can leave the creator holding rights the paying party assumed it had bought outright. This is especially easy to miss with freelance developers and design agencies.
5. Dispute resolution and governing law
Founders often leave this to a boilerplate line copied from a template, without considering whether arbitration or court litigation suits the size and nature of the relationship, which city's courts have jurisdiction, and which law governs if either party operates across states. Getting this wrong does not cause a dispute, but it makes an existing one slower and more expensive to resolve.
None of these clauses need to be adversarial to negotiate - most vendors expect and respect a contract that addresses them clearly. The cost of leaving them out only shows up later, and by then it is a great deal more expensive to fix than it would have been to draft properly the first time. If you would like a set of contracts reviewed before they go out for signature, our corporate & commercial team can help.