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Why it matters: An agreement signed by the wrong person — a personal name instead of the operating business, or a representative without authority to bind the company — may not be enforceable against the entity you intended to contract with. Courts require identifiable parties with legal capacity for contract formation.

What Clausio checks: That both parties are named by legal entity (LLC, Corp, etc.), that the signatory's role and authority are stated, and that the contract clearly identifies which party is the service provider and which is the client.

Legal basis: Restatement (Second) of Contracts §§ 9, 12–17 (1981) — contract formation requires identifiable parties with legal capacity. [Confidence: medium — Restatement persuasive authority]

Why it matters: Ambiguous scope is the most common source of service contract disputes. Without defined deliverables and acceptance criteria, clients add requirements mid-project without additional compensation, and providers claim completion of work that doesn't meet unstated expectations. Courts interpret ambiguous language against the drafter (contra proferentem), which typically means against the service provider.

What Clausio checks: That deliverables, timelines, and acceptance criteria are specified. Flags scope described only in general terms without concrete outputs or measurable completion criteria.

Legal basis: Restatement (Second) of Contracts §§ 201–203 (1981) — ambiguities in a standardized agreement are construed against the party who supplied the language. [Confidence: medium — Restatement persuasive authority]

Why it matters: Without agreed payment terms, a provider's remedy on a disputed invoice is quantum meruit — the reasonable value of services — which requires litigation to establish and is uncertain in amount. Clear payment-due dates and late-payment consequences (interest, suspension of services) give the client a contractual incentive to pay on schedule.

What Clausio checks: That the fee amount or rate, invoicing procedure, payment due date, and consequences of late payment are all specified. Flags if any of these are absent.

Legal basis: Restatement (Second) of Contracts § 347 — measure of damages for breach is the expectation interest. NYC service providers engaging in work over $800 may also have rights under the NYC Freelance Isn't Free Act (N.Y.C. Admin. Code § 20-928). [Confidence: medium for Restatement; NYC statute high]

Why it matters: Without an explicit IP clause, the service provider retains copyright in everything they create — even work fully paid for by the client. This is a statutory default that surprises clients who assume payment equals ownership. Even more surprising: a "work made for hire" designation only works for one of nine specific categories of commissioned works under US copyright law — most service deliverables require a separate written assignment.

What Clausio checks: That the agreement includes either a work-for-hire designation or a written copyright assignment for deliverables. Also checks that the service provider's pre-existing IP, tools, and methodologies are carved out from the assignment — protecting the provider's ability to use their own work product elsewhere.

Legal basis (high confidence): 17 U.S.C. § 101 — commissioned work is "work made for hire" only if it falls within one of nine statutory categories AND a signed written instrument designates it as such. 17 U.S.C. § 204(a) — any transfer of copyright ownership must be in writing and signed. Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) — copyright in independent-contractor deliverables does not automatically vest in the hiring party.

Why it matters: Service providers routinely access clients' non-public information — strategic plans, customer data, pricing, unreleased products. Without a written confidentiality clause, a client's recourse for unauthorized disclosure depends on proving the information qualifies as a trade secret — a harder standard than simple breach of contract. A well-drafted confidentiality clause also unlocks additional remedies under federal trade secret law.

What Clausio checks: That confidential information is defined, the provider's obligations are specified, and the DTSA § 1833(b) whistleblower-immunity notice is included — without it, the client forfeits the right to seek exemplary damages and attorney's fees under the Defend Trade Secrets Act.

Legal basis (high confidence): Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836 — federal civil cause of action for trade-secret misappropriation; remedies include injunctions, actual damages, and up to doubled damages for willful misappropriation. 18 U.S.C. § 1833(b) — parties entering confidentiality agreements must provide written notice of the DTSA whistleblower immunity; failure forfeits eligibility for exemplary damages and attorney's fees.

Why it matters: Warranties about the services — that they will be performed in a professional manner, that deliverables won't infringe third-party IP rights, that the provider has the authority to assign ownership — give the client clear remedies if those promises aren't kept. Unlimited implied warranties (fitness for particular purpose, merchantability) can expose providers to liability they never contemplated.

What Clausio checks: That the agreement includes express warranties about service quality and IP non-infringement, and — from the provider's perspective — that implied warranties are disclaimed to the extent permitted by law.

Legal basis: UCC § 2-316 (goods context, persuasive for services) — parties may disclaim implied warranties of merchantability and fitness for a particular purpose if the disclaimer is conspicuous. Service contracts typically disclaim implied warranties by express language. Courts apply reasonableness and conspicuousness standards. [Confidence: medium — UCC applies directly to goods; courts apply analogous standards to service contracts]

Why it matters: Without a liability cap, a service provider whose work falls short could face damages that dwarf the contract fee — including the client's lost business revenue, downstream losses, and third-party claims. A mutual cap set at total fees paid (or a multiple thereof) is standard in professional-services contracts. The exclusion of consequential damages is typically even more important than the cap itself.

What Clausio checks: That a liability cap is present and that indirect, consequential, lost-profit, and punitive damages are excluded. Flags if only one side is capped or if the cap is facially unreasonable relative to the contract value.

Legal basis (high confidence): UCC § 2-719 — parties may contractually limit or exclude consequential damages unless unconscionable; limitation of commercial consequential damages is not prima facie unconscionable. Courts apply heightened scrutiny for gross negligence and willful misconduct — caps typically do not protect against either.

Why it matters: Without an indemnification clause, a client sued by a third party because of the service provider's deliverable has no contractual right to be defended or reimbursed. Conversely, a one-sided indemnity requiring the provider to cover the client's own negligence may be unenforceable and is generally uninsurable.

What Clausio checks: That indemnification obligations are mutual (or clearly one-sided with notice), that they exclude coverage for the indemnitee's own sole negligence, and that the scope of covered claims is clearly defined.

Legal basis: General contract principles — indemnification as contractual risk allocation. Approximately 46 states have anti-indemnity statutes (primarily in construction contexts) that void provisions requiring indemnification for a party's own sole negligence or willful misconduct. [Confidence: medium — anti-indemnity statutes most squarely target construction; applicability to professional services varies]

Why it matters: Without clear termination provisions, ending a service relationship can require proving material breach — leaving both sides in limbo if there is disagreement. Auto-renewal clauses in service agreements have caused significant client disputes when notice windows are missed; "termination for convenience" rights give flexibility but must be paired with payment-for-work-completed provisions.

What Clausio checks: That start and end dates (or renewal terms) are specified, that termination rights for both cause and convenience are defined, that notice periods are stated, and that compensation through the termination date is addressed.

Legal basis: Restatement (Second) of Contracts §§ 237, 241 — a party's duty to perform is suspended when the other commits a material breach; factors for materiality include the extent of deprivation of expected benefit and adequacy of damages. [Confidence: medium — Restatement persuasive authority]

Why it matters: Without a choice-of-law clause, courts apply conflict-of-laws analysis that may select a state whose rules on IP, liability, and non-solicitation are very different from what the parties expected. A dispute resolution clause — arbitration, mediation-first, or a specified court — can significantly reduce the cost and time to resolve a service contract dispute.

What Clausio checks: That governing law and venue are specified and that a dispute resolution mechanism is named. Flags if governing law is absent or inconsistent with where both parties are located.

Legal basis: Restatement (Second) of Conflict of Laws § 187 (1971) — courts enforce the parties' chosen governing law unless the chosen state has no substantial relationship to the transaction or applying it would violate a fundamental policy of the state with the greater interest. [Confidence: medium]
Federal Arbitration Act, 9 U.S.C. § 2 (high confidence) — a written arbitration clause "shall be valid, irrevocable, and enforceable" save for standard contract defenses.