The Founders’ Desk | Amrapalli Twinkle Satpathy
Co-Founder & Vice President, Strategy & Corporate Solutions, ATS Sales Partners
Founders often focus intensely on price, scope and timelines when negotiating a commercial agreement. Those points matter. But the clauses that determine what happens when something goes wrong can be far more consequential.
One area deserves particular attention: how the contract allocates liability.
The commercial deal and the risk deal are not the same thing
A contract may look attractive on its face. The pricing works. The deliverables are clear. Both sides want to move quickly.
But beneath the commercial terms sits a second negotiation: who carries the financial and legal consequences if obligations are missed, data is compromised, third-party claims arise, confidentiality is breached, or the relationship ends badly?
That risk allocation is often shaped by limitation-of-liability language, indemnities, exclusions, warranties, insurance obligations and termination rights working together.
Why founders sometimes underestimate these clauses
Risk provisions are usually negotiated when everyone still expects the relationship to succeed. That can make them feel theoretical.
Risk clauses become very real only when there is a dispute.
A broad indemnity, an uncapped category of liability, a one-sided exclusion, or an obligation that extends beyond what the business can practically control may create exposure that is disproportionate to the value of the contract itself.
What to check before signing
Start with your maximum realistic exposure. Don’t look only at the headline cap; check which liabilities sit outside it. Confidentiality, intellectual property, data protection, fraud and other categories are often treated differently, and the details matter.
Next, look closely at the indemnities. Are they balanced and specific? Understand which events trigger them, whose conduct they cover and whether the obligation is commercially manageable.
Then ask whether the business can actually keep the promises it is making. A well-written obligation is still risky if operations cannot consistently meet it.
Finally, think about what happens when the relationship ends. Review the termination triggers, notice periods, outstanding payments, transition duties, confidentiality, data handling and the obligations that survive termination.
Legal review should support the commercial objective
The objective is not to remove every possible risk. Business involves risk.
The goal is to understand which risks are acceptable, which should be negotiated, which require operational controls, and which could fundamentally change the economics of the deal.
The best contract review therefore asks two questions at the same time: “What does this clause mean legally?” and “What could this mean for the business in practice?”
If you can’t answer in a sentence, it’s worth a closer look before your next signature.
The founder’s takeaway
Before signing an important agreement, look beyond the revenue, scope and delivery dates.
Ask what happens if the relationship does not unfold as planned.
That is where the contract stops being paperwork and starts becoming risk architecture.
Pipeline, contracts, and everything in between.
This article is for general informational purposes and does not constitute legal advice. Specific legal issues should be assessed in light of the relevant facts, contract and applicable law.
About the author
Amrapalli Twinkle Satpathy is Co-Founder & Vice President, Strategy & Corporate Solutions at ATS Sales Partners. Her areas of focus include corporate and commercial law, contracts, legal risk, governance and strategic legal advisory.
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