ClauseRadar

Sample contract audit report

An interactive example of a ClauseRadar audit for Northwind Labs, Inc. – Independent Contractor Agreement. Overall risk: HIGH (78/100). This agreement shifts almost all financial risk to you. Uncapped indemnification and a blanket IP grab are severe, and Net-90 payment plus unpaid scope creep put your cashflow at risk. Fix the two high-risk clauses before signing.

LIABILITY – HIGH risk

Contractor shall indemnify Company against all claims, damages and legal fees of any kind, with no cap.

If anything goes wrong, you could owe far more than the project paid. One dispute could wipe out a year of income.

IP OWNERSHIP – HIGH risk

Everything Contractor creates during the term, including pre-existing tools and personal projects, is work made for hire owned by Company.

The client would own your existing tools and side projects, and could use all work even if an invoice is never paid.

PAYMENT TERMS – MEDIUM risk

Contractor shall be paid net 90 days from invoice approval. Company may reject invoices at its sole discretion.

You would finance the client for three months or more, and the right to reject invoices means payment is never certain.

SCOPE CREEP – MEDIUM risk

Contractor will perform any additional tasks reasonably requested by Company without additional compensation.

There is no limit to unpaid work. The project can quietly grow until your effective hourly rate is close to zero.

JURISDICTION – LOW risk

Delaware law applies and all disputes must be brought in Delaware state courts.

Disputes would be expensive and hard to pursue from another country, which weakens your leverage in a payment disagreement.

Scan your own contract

Home Scanner Sample report Pricing Risk calculator Clause library Privacy Terms