Most contract disputes do not start with bad faith. They start with a contract that left too much open to interpretation — an ambiguous payment term, a missing termination clause, or an indemnification provision no one read carefully. By the time the dispute surfaces, both sides are reading the same language and reaching completely different conclusions.
Here are the five provisions a New Hampshire contract lawyer examines in every review — and why each one can determine the outcome of a dispute that hasn’t happened yet.
The problem was right there in the contract. They just didn’t see it before they signed.
1. Payment Terms and What Triggers the Obligation
The most common source of contract disputes in commercial and small business agreements is payment — specifically, when it is due, what triggers the obligation, and what remedies exist when it doesn’t arrive.
A contract that reads “payment due upon completion” seems clear. In practice, “completion” is often undefined, leaving both parties free to argue about when it occurred. Key questions in any payment provision review:
Red Flags in Payment Provisions
- Completion or milestone triggers that are not objectively measurable
- Conditions precedent to payment that give the paying party unilateral discretion
- No late payment interest or remedy specified
- No mechanism to dispute an invoice without triggering a default
- Retainage provisions with no defined release trigger
2. Scope of Work and Change Order Provisions
For service contracts and construction agreements, what the contract says you are being paid to do is as important as how much you are being paid. Under New Hampshire contract law, a contractor who performs work outside the written scope without a signed change order may have difficulty recovering for that additional work. See RSA 382-A (New Hampshire UCC) for the governing principles on contract modification.
A functioning change order clause requires additional work to be authorized in writing before it begins. A contract silent on scope changes effectively allows one party to expand the work unilaterally while arguing that additional compensation is not owed.
3. Termination Rights — Yours and Theirs
Every contract should be clear about how and when either party can exit. Termination provisions that appear balanced often aren’t once the conditions are examined carefully.
| Termination Type | What It Means | Key Risk |
|---|---|---|
| Termination for Convenience | Either party can exit for any reason or no reason | You may owe nothing — or be owed nothing — for completed work |
| Termination for Cause / Default | Exit triggered by specific contractual breach | Cure periods, notice requirements, and dispute rights must be defined |
| Automatic Termination | Contract ends upon occurrence of a specified event | Events may be drafted broadly enough to give one party unilateral exit |
4. Indemnification and Liability Limitations
Indemnification clauses — requiring one party to cover the other’s losses in certain circumstances — are among the most consequential provisions in any commercial contract and among the most frequently misread. A one-sided indemnification clause can require you to cover the other party’s legal fees and damages even where you were not at fault.
Limitation of liability clauses cap recoverable damages. Whether a cap benefits or hurts you depends entirely on which side of a dispute you are more likely to be on. A contract that caps the counterparty’s liability to the contract price while leaving your exposure unlimited is not a balanced instrument.
The Uniform Commercial Code, as adopted in New Hampshire, provides baseline rules on consequential damages limitations — but commercial contracts regularly modify those defaults, sometimes significantly.
5. Dispute Resolution Clause and Governing Law
Dispute resolution and governing law provisions are treated as boilerplate. They are not. These clauses determine where disputes are heard, under which state’s law, and by whom. Their practical effects include:
Mandatory Arbitration
Waives your right to a jury trial. Can be faster and cheaper — or more expensive and less favorable — depending on how the clause is drafted and who administers it.
Governing Law
If you are a New Hampshire business and the contract specifies another state’s law, disputes are interpreted under that state’s contract law — not New Hampshire’s. That can change outcomes.
Forum Selection
Requiring litigation in another state dramatically increases your cost of pursuing or defending a claim, and is often used as a settlement-pressure tactic.
Attorney’s Fee Shifting
New Hampshire does not generally award attorney’s fees in contract disputes unless the contract provides for it. The presence or absence of a fee-shifting clause is a significant factor in the economics of any potential dispute.
For a related discussion of what happens when a contract is breached, see our post on breach of contract in New Hampshire: what are your options.
Have a Contract You Need Reviewed?
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This article is for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this post. Attorney advertising.
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