How to negotiate those 'deal killing' clauses

These risks are not always obvious. They often sit in standard boilerplate clauses that are skimmed over – only resurfacing when a deal goes wrong. Any effective negotiation should include these clauses, addressing them confidently, without stalling momentum. 

Below are some key points to consider: 

Indemnities are a common source of conflict because they quietly reallocate risk. Broad indemnities can expose a party to losses beyond the contract’s value, especially where they are uncapped, triggered by allegations rather than proven breaches, or apply on a one-way basis. 

Successful negotiation here focuses on proportionality: narrowing indemnities to defined third-party claims, linking them to fault or control, and ensuring they align with insurance and agreed liability limits.

Liability caps often look straight-forward but can be deceptive. A cap that is too low, or riddled with carve-outs, can render the commercial bargain meaningless. 

Rather than arguing theoretical numbers, focus on tying caps to commercial realities such as fees paid, revenue at risk, or insurable exposure. Clarity up front around which liabilities genuinely sit outside the cap helps avoid surprises later.

Intellectual property ownership is another frequent deal-breaker, particularly in technology and services contracts. Vague drafting around pre-existing IP, newly created works, and permitted use invites disputes long after the contract is signed. 

Negotiation is most effective when it separates ownership from usage. Where ownership cannot be agreed, carefully structured licences can preserve both parties’ interests without amplifying risk.

Termination rights also warrant careful handling. Termination for convenience, short cure periods, or overly broad survival clauses can leave one party bearing prolonged obligations with  no commercial upside. 

Balanced notice periods, clear consequences of exit, and a tightly defined list of surviving provisions provide predictability on both sides.

Other ‘contract killers’ frequently include: 
•  Governing law
•  Dispute resolution mechanisms
•  Payment terms
•  Confidentiality, and change control.

Ultimately, negotiating these is about confidence and efficiency. When risk is allocated in proportion to control and reward, contracts stop being weapons – and start doing their job.

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