By Buddy Broussard, LegalSifter
Most experienced business leaders are comfortable reviewing and negotiating familiar deal terms in their commercial contracts: scope of work, pricing, delivery timelines, renewal periods. But negotiations rarely stall over those points.
World Commerce & Contracting’s (WorldCC) annual “Most Negotiated Terms” research consistently finds that risk allocation clauses, like limitation of liability and indemnity, dominate negotiation priorities.
These provisions may not affect day-to-day operations. But they determine what happens in worst-case scenarios: missed deadlines, failed delivery, third-party claims, or unexpected financial exposure.
That’s why managing these clauses consistently is one of the most critical, and most difficult, parts of contract review at scale, especially for non-lawyers.
Key takeaways
The contract terms most negotiated and disputed are rarely the commercial deal points—they’re legal risk provisions.
Clauses like liability, indemnity, and warranties determine worst-case exposure when performance breaks down.
Most organizations already have playbook-ready standards—the challenge is documenting them and then applying them consistently at scale.
AI contract review tools help operationalize standards to mitigate risk and ensure compliance.
AI redlining is no longer optional for high-volume contracting teams. Here’s What to Look for in an AI Redline Solution
Across industries and contract types, 7 provisions appear repeatedly at the center of negotiation and dispute:
Each one plays an outsized role in determining risk allocation, and each becomes exponentially harder to manage when contract volume increases.
Few provisions shape contract risk more directly than limitation of liability. At its core, this clause answers a simple question: What is the maximum exposure if the deal goes wrong?
That’s why liability caps are among the most heavily negotiated terms in commercial agreements. A well-structured cap creates predictability. An absent or poorly drafted one can create open-ended exposure far beyond the value of the contract itself.
Most organizations take a consistent position here, often tying liability to fees paid over a defined period, because the business needs downside protection that aligns with commercial reality.
Liquidated damages provisions are common in supply chain, manufacturing, construction, and other delivery-driven agreements.
They allow parties to pre-negotiate a financial consequence for a specific failure, typically delay, without needing to prove actual losses later.
The risk is straightforward: unless carefully limited, liquidated damages can create immediate margin impact. Uncapped penalties or overly broad triggers can transform a routine delivery obligation into a significant financial liability.
For contracting teams, the key issue is consistency: ensuring these clauses remain narrowly tailored and proportionate to the business impact.
Indemnification provisions are often where contractual risk becomes legal risk. Indemnity determines who must step in, and pay, when a third-party claim arises. Defense costs alone can become substantial, even before liability is established.
Because indemnities are drafted in countless ways (sometimes deliberately), they remain one of the most negotiated and disputed provisions in commercial contracting.
Organizations typically aim to limit indemnity to defined scenarios such as negligence, injury, or IP infringement, while resisting broad, catch-all language that effectively shifts unlimited litigation exposure onto one party.
Consequential damages are often the largest source of uncertainty in a contract’s risk profile.
Unlike direct damages, consequential damages can include lost profits, business interruption, reputational harm, or cascading downstream effects, the kinds of losses that are difficult to forecast and easy to inflate in a dispute.
For that reason, many commercial agreements include mutual waivers of consequential damages. But carveouts and exceptions matter: overly broad exclusions can quietly undo the waiver and reopen significant exposure.
Contract review discipline here is less about spotting the clause itself, and more about recognizing when risk is reintroduced through subtle drafting.
Warranty language defines what one party is actually committing to deliver, and what the other party can reasonably rely on. Disputes often arise when warranties are drafted too broadly or remedies are unclear. A promise without a remedy creates uncertainty. A remedy without limits creates risk.
Most organizations seek to keep warranties tied to realistic performance standards, with defined corrective obligations such as repair, replacement, or refund.
The contracting challenge is ensuring those boundaries remain intact, even when counterparties introduce expansive language that sounds harmless but creates obligations that are difficult to operationalize.
Force majeure provisions gained renewed prominence after COVID-era disruptions, but they have always played a critical role in defining contractual resilience.
These clauses address what happens when events outside either party’s control, such as natural disasters, government action, supply interruptions, prevent performance.
The balance is delicate: force majeure should excuse genuine impossibility, not provide an easy exit from obligations. Contracting teams must assess whether these clauses are narrowly defined, time-bound, and structured to preserve fairness.
In high-volume contracting environments, inconsistency here can lead to very different outcomes in similar operational disruptions.
Intellectual property provisions often outlast the commercial relationship itself. They determine who owns pre-existing materials, work product, deliverables, data, and derivative rights, long after the contract expires.
For many organizations, IP represents long-term value and leverage. A single poorly drafted clause can create unintended ownership transfers or reuse rights that conflict with business strategy.
Consistency is essential: IP terms should align with enterprise standards, not vary contract by contract based on drafting differences.
Most organizations already have positions on these clauses. The challenge isn’t deciding what’s acceptable. It’s ensuring those standards are applied consistently across high volumes of agreements, where legal language varies widely and risk is often introduced through subtle carveouts or creative drafting.
That’s where AI contract review delivers immediate value. LegalSifter ReviewPro helps contracting teams operationalize their playbook positions at scale by identifying the concepts that matter, comparing them to approved standards, and making required edits automatically, regardless of how the clause is written, all directly inside Microsoft Word.
The result is faster, more consistent contract review, with fewer missed liabilities, fewer downstream disputes, and stronger governance over commercial risk. Because in contracting, the biggest risk is rarely in the scope or the price. It’s in the legal terms that determine what happens when something goes wrong.
To see how ReviewPro helps contract teams apply standards consistently and review agreements faster, request a demo or free trial today.
As Vice President of ReviewPro at LegalSifter, Buddy brings more than three decades of experience transforming how organizations manage contracts. His current focus is on ensuring clients get immediate value from ReviewPro by delivering playbooks that are thoughtfully crafted, clearly positioned, and ready to perform out of the box. As licensed attorney with a JD from the University of Texas School of Law and a BA in English and Philosophy from Rice University, Buddy has built a career on simplifying complexity, driving efficiency, and creating practical, high-impact contracting solutions.