The Contract Mistakes That Turn Business Disputes Into Lawsuits

Most six-figure business lawsuits do not begin with fraud, bad actors, or reckless decisions. They often begin with small contract mistakes in agreements that were signed quickly to keep a deal moving.

What seems like a minor drafting issue at the outset can later become the central issue in an expensive dispute. When a business relationship deteriorates, those overlooked details often determine whether a disagreement can be resolved efficiently or must be litigated.

Below are the most common contract problems that turn manageable disputes into costly lawsuits.

1. Vague or Incomplete Scope of Work

One of the most common causes of contract litigation is an unclear scope of work. This often includes poorly defined deliverables, missing deadlines, or vague performance standards. When expectations are not clearly defined, courts are forced to interpret intent using emails, invoices, and testimony rather than the contract itself. That uncertainty drives up legal costs and makes outcomes difficult to predict.

2. Weak or Missing Termination Provisions

Many contracts explain how a business relationship begins but fail to address how it ends. Common issues include the absence of a termination-for-convenience clause, no opportunity to cure alleged breaches, or unclear post-termination obligations. Without a clean exit mechanism, even a relatively minor disagreement can escalate into litigation simply to determine whether the contract can be terminated at all.

3. Attorney’s Fees Clauses That Escalate Risk

Attorney’s fees provisions are frequently overlooked or copied from templates without understanding their impact. A broad or one-sided fee-shifting clause can dramatically raise the stakes of any dispute. When attorney’s fees are in play, parties are often incentivized to litigate more aggressively, making early resolution less likely.

4. Conflicting or Inconsistent Contract Terms

Contracts assembled through revisions, templates, or last-minute edits often contain internal inconsistencies. Terms in the main agreement may conflict with exhibits, addenda, or incorporated documents. When provisions conflict, courts must decide which clause controls—often based on technical drafting rules rather than business intent. This leads to increased motion practice and higher legal fees.

5. No Limits on Liability or Damages

Contracts that lack limitations on liability or damages expose businesses to risks far greater than most owners anticipate. Without these protections, claims may include lost profits, consequential damages, or broad indemnity obligations. What begins as a modest contract dispute can quickly grow into claims far exceeding the value of the original agreement.

6. Overly Broad Indemnification Provisions

Indemnification clauses are another frequent source of expensive litigation. Poorly drafted provisions may require a business to defend and pay for claims it did not cause, including claims arising from the other party’s negligence. These disputes often involve multiple parties and insurance issues, significantly increasing cost and complexity of litigation.

7. The Common Pattern

Most six-figure contract lawsuits follow the same pattern: a contract that “seemed fine,” a relationship that deteriorated over time, and no clear contractual path to resolve the dispute without court involvement. By the time litigation begins, the outcome is often driven by drafting technicalities rather than business realities.

8. A Proactive Step That Saves Money

Contracts should function as risk-management tools, not just deal documents. A periodic contract review of the agreements and templates that a business uses most can identify hidden exposure before it becomes a lawsuit.

If your business is operating under contracts that have not been reviewed in several years, now is the time to address potential risk. A focused legal review of your key business contracts can help clarify obligations, limit exposure, and reduce the likelihood of costly disputes later.