Contract Review Report · Sample
Vendor Service Agreement — Acme Co.
Filed for: sample@example.com · Risk profile: Medium
Section 7: Limitation of Liability
High risk
Issue: Liability cap is set at $500 with no carve-out for IP infringement, data breach, or indemnification. One missed event exceeds the cap.
Suggested rewriteReplace the $500 cap with the greater of $50,000 or 12 months of fees paid, and add standard carve-outs for IP infringement, breach of confidentiality, and indemnification obligations.
Section 4: Intellectual Property
Medium risk
Issue: Vendor assigns all IP — including pre-existing and background IP — to your company. Could create third-party obligations if reused elsewhere.
Suggested rewriteCarve out "Background IP" (defined as IP developed prior to or independent of this engagement) from the assignment, and require a perpetual license — not a transfer — for Background IP embedded in deliverables.
Section 12: Auto-Renewal
Low risk
Issue: 60-day notice window for non-renewal — easy to miss if calendar reminders aren't set.
Suggested rewriteAdd a written notice requirement (email counts) and a 30-day pre-renewal reminder obligation from the vendor.
Reviewer summary
Two medium-to-high risk clauses (liability cap and IP assignment) warrant negotiation before signing. The auto-renewal clause is workable with a calendar reminder. Recommend $50K+ liability cap with IP/data carve-outs and a Background IP carve-out for Section 4.