Commercial contracts are more than paper and signatures—they’re legal ecosystems packed with obligations, permissions, and escape hatches. And when a dispute lands in court, judges don’t skim these agreements—they dissect them. Whether it’s a contract gone sideways in a startup deal or a disagreement between two seasoned businesses, courts often zero in on problematic terms that are too vague, too one-sided, or just legally risky.
According to Forbes, even small businesses can face significant risk from poorly drafted agreements, making it critical to spot potential red flags before they lead to costly litigation. At Jabaly Law, we’ve handled commercial disputes across industries, and we’ve seen how subtle oversights in contract language can quickly turn into full-blown legal showdowns.
Let’s talk about what courts usually focus on—and what experienced legal eyes are trained to spot from the start.
Termination Clauses That Leave Too Much Open
Termination provisions are often misunderstood or neglected altogether. Some agreements include language that permits termination “for any reason,” which might seem flexible at first glance. But without clarification—such as notice periods, cure opportunities, or defined cause—this clause can trigger disputes around wrongful termination, especially when one party is financially impacted.
When courts review termination rights, they examine not just the words, but the intent. A contract that lacks specific, mutual obligations around termination is a common battleground in business litigation cases in Virginia and Washington, D.C. We’ve seen disputes where ambiguous clauses opened the door for claims like breach of good faith or wrongful interference with business expectations.
Exclusivity Clauses That Limit Freedom to Compete
Exclusivity sounds like a win—until it becomes a liability. Commercial contracts that lock one party into exclusive relationships (especially without time limits or territory restrictions) often raise red flags for courts.
In litigation, overly broad exclusivity can resemble restraint of trade. Courts scrutinize whether the clause serves a legitimate business purpose or merely suppresses competition. For clients in growing regions like Fairfax, VA, and Arlington, VA, we’ve reviewed contracts where an exclusivity clause effectively trapped the business from scaling, turning what was once an advantage into a strategic disadvantage.
Indemnity Provisions That Shift the Entire Burden
Indemnification is a favorite clause for contract drafters, but a favorite battleground in courtrooms. One-sided indemnity provisions can collapse under scrutiny. Courts ask: Is this indemnity mutual? Does it cover third-party claims? Are damages, attorney fees, and liabilities clearly defined?
When only one party bears all the risk, it may raise questions of unconscionability, especially in cases involving startups or smaller firms dealing with larger, more sophisticated entities. This issue often comes up in our business law work, where founders may unknowingly agree to indemnify investors or partners without limits or context.
Arbitration and Dispute Resolution That’s Stacked
Many contracts toss in an arbitration clause to avoid courtroom drama. But not all arbitration language is created equal. We’ve reviewed contracts in Fairfax, VA, and Arlington VA, where dispute resolution clauses mandated arbitration in a distant jurisdiction, favored one party’s selected arbitrator, or imposed unrealistic timeframes for response.
Courts will enforce fair arbitration clauses, but when they look overly stacked or procedurally unjust, courts can strike them down or refuse enforcement. We often advise reviewing these clauses with a litigator’s eye, especially since this is where many cases are won or lost before they even begin.
Undefined or Circular Definitions
Here’s a classic trap: terms like “Material Breach,” “Best Efforts,” or “Commercially Reasonable Time” are left undefined. Courts are then left to interpret them—often by relying on case law or context, which introduces uncertainty.
This ambiguity is especially risky in high-stakes real estate transactions, where even a small delay or minor mistake can escalate into significant litigation. We’ve seen multiple cases involving real estate attorney disputes in Fairfax, VA, where undefined terminology created friction during enforcement or closing.
One-Sided Remedies and Liquidated Damages
If a contract grants one party a suite of remedies, including injunctions, damages, and specific performance, and leaves the other with little to no recourse, courts may question the fairness and enforceability.
Likewise, a liquidated damages clause that penalizes one side with no relation to actual losses may be deemed unenforceable. Courts typically ask: Is the amount a reasonable forecast of potential harm? Or is it punitive? In several litigation matters we’ve handled, disputes centered on whether the damages clause reflected reality or was just a scare tactic.
No Mechanism for Change
Contracts that are static—that is, they don’t include a defined process for amendments—can cause problems down the line. Business evolves, and commercial relationships do too. Without clear processes for adding terms, updating pricing, or revisiting obligations, even small shifts can generate disagreements.
We routinely include amendment provisions in deals we structure for clients in Alexandria, VA, because relying on verbal understandings or email chains for change management rarely holds up in court.
Disguised Employment Relationships
A major issue in commercial agreements—particularly in industries with gig workers or independent contractors—is misclassification. If your agreement treats a contractor like an employee (think: fixed hours, control over methods, or integration into the business), courts may recharacterize the relationship during disputes.
This is a growing concern in jurisdictions like Washington, D.C., and Virginia, especially with enforcement attention increasing. Our experience in legal counsel services for businesses in Fairfax, VA, shows that proper classification and language around autonomy, control, and tax obligations are critical.
Mergers and Acquisitions: Relying Too Heavily on Reps and Warranties
In M&A deals, courts expect careful attention to representations and warranties. But boilerplate language isn’t enough. If reps and warranties are vague—or worse, not tied to disclosure schedules—litigation often follows.
We’ve seen issues arise when sellers make general assurances (e.g., “to the best of our knowledge, all permits are in place”) but buyers later discover material issues. In our real estate litigation work, we’ve handled disputes where inadequate reps led to post-closing battles over financials, zoning, or ownership rights.
No Governing Law or Jurisdiction Clause
When there’s no choice-of-law clause, courts apply their own conflict-of-law rules—adding an extra layer of unpredictability. Without jurisdictional language, parties may face litigation in multiple states, creating unnecessary complexity.
This is particularly problematic for businesses operating across Fairfax, Alexandria, and the Washington, D.C. metro area. We help clients lock in both governing law and forum clauses to minimize chaos if disputes arise—making it easier to litigate efficiently and with known legal standards.
Intellectual Property Clauses That Lack Clarity
Contracts involving IP—whether licensing, joint ventures, or SaaS agreements—require precision. Who owns what? Who licenses what? Can the license be transferred or sublicensed?
A poorly drafted IP clause can turn a collaboration into a courtroom battle. Courts want to see clarity and evidence of intent. And in high-value IP cases, especially in business transaction matters, vague or conflicting provisions are often where the fire starts.
Silence on Force Majeure and Crisis Handling
If your contract was written before 2020, there’s a decent chance it didn’t contemplate pandemics, supply chain disruptions, or geopolitical events. But courts now closely analyze force majeure clauses to determine whether performance can be excused during crises.
We recommend explicitly addressing events that could trigger suspension or termination of obligations—and ensuring the clause doesn’t just copy-paste generic language. We’ve had many clients in Falls Church, VA, come to us after discovering their standard contract didn’t give them the protection they thought it did.
Final Thoughts
When a contract dispute reaches court, it’s rarely because one party failed to read the document—it’s because both parties read it differently. Courts then step in as the final interpreter, looking not just at what’s written, but how it reflects intent, balance, and enforceability.
At Jabaly Law, we bring litigation-tested experience into every contract review. Because we’ve been in the trenches, we know what language courts challenge—and what language actually holds. Commercial contracts shouldn’t just function—they should stand up to scrutiny when it matters most.
Work With an Experienced Business Lawyer That Understands the Stakes
At Jabaly Law, our deep experience in business litigation attorneys in Washington, D.C., and across Northern Virginia gives us a unique advantage: we don’t just draft contracts—we litigate them. That means we understand how judges interpret clauses, where red flags get raised, and how small words can carry enormous legal weight.
Whether you’re facing a dispute, planning a high-stakes negotiation, or simply need guidance from an experienced business lawyer in Falls Church, VA, we’re here to help.
Call now or explore our full list of services to protect your next move. Learn more about us and why we’ve earned the trust of business owners from Fairfax to Arlington, VA. We offer practical, strategic, and real-world legal counsel services for businesses in Alexandria, VA, at every stage of growth.
