The Bitala & Kakinga Contract Red Flag Checklist

This checklist is a powerful first step, but it is not a substitute for professional legal counsel. A single hidden clause could put everything you’ve built at risk.

Q1 : Are all dates and figures correct and consistent?
Q2 : Is the contract missing key details?
Q3 : Is there a clear termination clause?
Q4 : Are there any handwritten changes or additions?
Q1 : Does the contract assign all liability to one party?
Q2 : Are there overly broad/restrictive non-compete clauses?
Q3 : Does the contract include a personal guarantee?
Q3 : Does the contract include a personal guarantee? (copy)
Q4 : Are there ambiguous terms like “reasonable time” or “best efforts”?
Q1 : Does the contract clearly define what constitutes “performance”?
Q2 : Are there clear procedures for making decisions and resolving disputes?
Q3 : Does any clause give the other party unilateral control?
Q4 : Is the force majeure clause fair and balanced?
Q1 : Is the payment schedule clear and tied to milestones?
Q2 : Are there any hidden fees or unexpected costs?
Q3 : Does the contract specify a fair jurisdiction for disputes?
Q4 : Is arbitration/mediation process clear and balanced?
Q5 : Who pays attorney fees in case of dispute?
Q6 : Is intellectual property (IP) ownership clearly defined?
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1: Fine Print Scrutiny

  • A single typo in a date or monetary value can invalidate an entire clause or lead to a costly dispute.
  • A vague contract is an invitation for disagreement. Look for specific details regarding deliverables, timelines, payment schedules, and responsibilities.

You need to know the conditions under which you can exit the agreement and what the associated costs or penalties might be.

  • Uninitialed or unapproved changes can render a contract unenforceable.

3: Performance & Governance Safeguard

  • The contract should specify the exact conditions and metrics that must be met to consider the work or service completed. For example, is performance defined by a signed deliverable, a specified number of hours, or a functional product?
  • Look for clauses on governance. The contract should outline how key decisions will be made, who has authority, and what happens in case of a deadlock.
  • Ensure the contract maintains a balanced power dynamic and doesn't give a single party the right to change terms without mutual agreement.
  • This clause addresses unforeseen events. Make sure it doesn't unfairly excuse one party from their obligations while leaving you exposed.

2: Liability & Risk Assessment

An unbalanced liability clause is a major red flag. It may try to hold you responsible for things you cannot control.

  • Be wary of clauses that could prevent you from pursuing future business opportunities or working in your industry after the contract ends.
  • This clause is a serious red flag as it makes you personally liable for a business debt or obligation.
  • Look out for vague language like "best efforts," "reasonable time," or "industry standard." These terms can be interpreted differently and may not hold up in court.
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4: Payment Terms & Dispute Resolution Strategy

  • A vague payment schedule can lead to cash flow problems. Ensure it's based on tangible progress, not subjective approval.
  • The contract should fully disclose all costs, including late fees, taxes, and charges for additional services.
  • Ensure the contract clearly states where any legal action would take place. If it’s not in a convenient or a fair location, you may want to reconsider.
  • Some contracts require you to resolve disputes through alternative methods before going to court. Make sure this process is clear and fair.
  • Be sure you understand who is responsible for paying legal fees in case of a dispute.
  • Ensure the contract clearly states who owns any trademarks, copyrights, or other IP created during the term of the agreement.
Contact Bitala & Kakinga today to get a comprehensive legal review of your contract and safeguard your interests.
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