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Red flags in Contracts


Many clients have been asking us how to tell that a contract/agreement is not favorable, considering all clauses have been stated in the agreement. Some have signed and gone into contracts without noticing the RED FLAGS that can later cost them or make them lose millions of shillings. Below are the 9 examples of RED FLAGS to look out for in an agreement.

  1. Unclear or ambiguous language: Any ambiguity in the contract can lead to disputes and disagreements down the line. Make sure all terms and language are clearly defined.
  2. One-sided terms: A contract should be a mutually beneficial agreement. If one party is getting a significantly better deal than the other, it may be a red flag.
  3. Missing or incomplete information: A contract should include all necessary details and information. If any key information is missing or incomplete, it could cause problems during the contract period.
  4. Non-disclosure clauses: Non-disclosure clauses can be helpful in protecting confidential information, but they may also limit your ability to share or use certain information.
  5. Lack of flexibility: Contracts that are too rigid may not account for unforeseen circumstances or changes in circumstances.
  6. Short-term focus: Contracts that are focused solely on short-term gains may not account for long-term implications or consequences.
  7. Lack of legal review: Contract negotiations should always be reviewed by a lawyer to ensure the terms are fair and legally binding.
  8. Excessive demands: If one party makes excessive or unreasonable demands, it may be a sign that the other party should walk away from the deal.
  9. Requesting that the work or the job commences without signing the contract first is a big red flag, often times the other party is not willing to commit or may not pay for the services offered to them and you shall have no proof of an agreement because it was not signed.

In conclusion, always be aware of these red flags before signing any contract or agreement.

How can we assist?

The success of a startup is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having understanding how contracts/agreements are drafted. At Netsheria International, we offer a wide scope of legal documents that can be tailored to meet the requirements for different businesses. For more information, kindly visit our website at www.netsheria.com


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