Before You Sign: Ten Clauses to Review in Any Commercial Contract

In our experience, most commercial disputes that reach court did not begin the day the disagreement arose — they began the day a contract was signed with vague or missing clauses. Legal review before signing costs far less than litigation after. Here are the ten clauses we recommend examining in any commercial contract:

The Ten Clauses

• The parties and their capacity: verify the commercial registration and the signatory’s authority to bind the company (valid delegation or power of attorney).
• Subject and scope: a precise description of the goods or services, measurable specifications, and what is expressly out of scope.
• Price and payment mechanics: amount, currency, payment milestones, and whether prices include VAT.
• Term and renewal: start and end dates — and watch for automatic renewal clauses and the window to object.
• Each party’s obligations: a clear matrix of who does what and when — ambiguity here is the primary fuel of disputes.
• Liquidated damages: are they proportionate and capped? Excessive penalties risk judicial adjustment; omitting them weakens your leverage.
• Early termination and its effects: when each party may terminate, on what notice, and what happens to amounts paid and work completed.
• Force majeure: its definition, notification procedure, and effect — suspension of obligations or termination.
• Confidentiality and non-compete: their temporal and geographic scope — loosely drafted clauses can bind you further than you imagine.
• Dispute resolution and governing language: courts or arbitration, in which forum, and which language version prevails? In Saudi Arabia, an accurate Arabic version is not optional.

A Final Word

A good contract is not written for the day the parties agree — it is written for the day they disagree. A single legal review before signing, covering the critical clauses above, typically saves you years of dispute.