5 Contract Clauses That Cost Seattle Businesses Thousands (And How to Fix Them)

Consider the following: fuzzy scope language that lets clients demand more without paying more, missing dispute resolution mechanisms that force you into expensive litigation, payment terms that don't protect you when the other party ghosts. These aren't theoretical problems. They're contract clauses (or missing clauses) that create real, expensive disputes for Seattle businesses every week.

Most business owners use the same contract template for years without realizing how it can it cost them money. A vague clause here, a missing provision there, and suddenly you're in a dispute that costs more to resolve than the original contract was worth. This article breaks down the five contract clauses that create the most problems for businesses in Seattle and King County, what each clause should actually say, and how to fix your contracts before they blow up.

What Makes Scope Language Vague (And Why It Matters)

Scope language defines exactly what you're agreeing to do or provide. When it's vague, both parties think they agreed to different things, and disputes follow quickly.

The problem: "Contractor will provide all necessary services" or "Seller will deliver quality products" tells you nothing. What services are necessary? Who decides? What makes a product quality? These phrases can invite disagreement.

What might go wrong: Clients demand additional work claiming it was included in "all necessary services." Contractors refuse, claiming it's outside scope. Both parties genuinely believe they're right because the contract supports both interpretations. Now you're either doing unpaid work or wasting time and money fighting about it.

What the clause may include:

Specific deliverables with clear descriptions.  Clear and specific descriptions help. If you're building something, describe it in detail. If you're providing services, list exactly which services and how many hours or iterations are included.

Clear exclusions. Sometimes it's easier to say what's NOT included than to list everything that is. "This proposal does not include electrical work, permitting fees, or site cleanup."

Process for handling additions. When scope inevitably needs to change, your contract should explain exactly how changes get requested, approved, and priced. Which brings us to the next problem clause.

 

Why Your Contract Needs a Change Order Process

Change orders happen. The client wants different finishes, or market conditions change, or you discover problems during execution that require adjustments. Without a documented process for handling changes, every modification becomes a negotiation and potential dispute.

The problem: Your contract says nothing about how changes get handled, or it has vague language like "changes by mutual agreement."

What goes wrong: You do extra work assuming you'll get paid.  But perhaps the client assumes it was included already.  Imagine a scenario where you have no written approval for the change and no documentation of the price adjustment. When the bill comes, the client refuses to pay because there's no paper trail proving they agreed to the additional cost.

What the clause may include:

Written approval requirement. All changes must be in writing and signed by both parties before work begins. No exceptions, even for "quick" changes.

Pricing mechanism. Explain how changes will be priced (time and materials, markup on costs, fixed fee increase, etc.). This prevents disputes about whether the change order price is reasonable.

Timeline adjustments. Changes often affect deadlines. Your clause should make clear that change orders can extend completion dates.

Clear scope statements can save projects from complications. Vague scope language creates disputes that cost far more than getting the contract right in the first place.

What Happens When Payment Terms Don't Protect You

Payment terms determine when you get paid, how much, and what happens if you don't. Weak payment terms leave you chasing money with no leverage and no clear remedies.

The problem: "Payment due upon completion" or "Net 30" with nothing else. No deposit requirement. No progress payments. No interest on late payments. No consequences for non-payment.

What goes wrong: You complete the work. The client finds reasons to delay payment. Thirty days becomes sixty, then ninety. You have no contractual right to interest. No mechanism to stop work if they don't pay installments. You end up financing their project with your own cash flow.

Under Washington law (RCW 4.16.040), you have six years to file suit for breach of a written contract. That's a long time to wait for payment, and litigation costs money. Better payment terms prevent these situations.

What the clause may include:

Payment schedule tied to milestones. For longer projects, consider if you need to break payments into deposits, then progress payments at specific completion points, and final payment. This  may give you leverage throughout the project.

Interest on late payments. Specify the interest rate (make sure it complies with Washington's usury laws) that accrues on overdue amounts. This incentivizes on-time payment.

Right to suspend work. If a payment is late, you need the contractual right to stop work until you're paid current. Without this clause, you're obligated to keep working while they owe you money.

Clear invoice and approval process. Define how long the client has to review invoices, what constitutes approval, and when payment is actually due (from invoice date, from approval, etc.).

The Dispute Resolution Clause Most Contracts Are Missing

Litigation  can become expensive. Court calendars in King County often have a significant backlog, which may impact scheduling. When a contract dispute goes to court, even winning costs you time and money. Yet most business contracts say nothing about how disputes will be resolved.

The problem: No dispute resolution clause at all, or weak language like "the parties agree to resolve disputes amicably."

What goes wrong: Disagreements arise. No process exists for resolving it short of filing suit. One party (or both) lawyers up. You're now in litigation that could take years and cost tens of thousands in legal fees. Even if you win, you've may have spent significant money and time on a dispute that could have been resolved another way.

What the clause should include:

Step-by-step escalation. Start with negotiation between principals, then mediation, then arbitration or litigation. Each step has a timeline (thirty days for negotiation, etc.).

Mediation or arbitration requirement. These alternative dispute resolution methods are faster and generally less expensive than court. Your contract can require them before litigation is allowed.

Fee allocation. Consider whether the losing party would pay the winner's legal fees (prevailing party provision), or if each side pays their own regardless. This affects the incentive to litigate versus settle.

Choice of law and venue. For Washington businesses working with out-of-state parties,  consider specifying that Washington law applies and where disputes will be heard (King County Superior Court, for example).

Missing dispute resolution mechanisms force you into expensive litigation. Prevention often costs a fraction of what remediation does.

Why Termination Clauses Matter More Than You Think

Every contract eventually ends. The question is whether it ends smoothly as according to clear terms, or messily with disputes about final payments, return of materials, and other continuing obligations.

The problem: No termination clause, or vague language like "either party may terminate with notice."

What goes wrong: Perhaps you want out of a problematic client relationship. You give notice. They claim you breached by terminating. You claim you had the right. The contract doesn't clearly say who's right. Now you're disputing whether the termination was proper, what final payments are owed, what happens to work in progress, and whether either party owes damages.

What the clause may include:

Termination for cause. This should define what constitutes cause (breach of contract, non-payment, failure to perform). Explain the notice required and cure period before termination becomes effective.

Termination for convenience. Consider: can either party terminate without cause? If so, how much notice is required? Is any fee or penalty owed?

Effects of termination. What happens to payments already made? Work in progress? Intellectual property? Materials purchased? Client data? The clause should cover all of this.

Survival provisions. Some obligations continue after termination (confidentiality, non-disparagement, warranties).  It may help you to list which provisions survive.

Weak termination clauses may create disputes about how the relationship ends, what's owed, and what obligations continue. Strong clauses make endings clean.

Getting Your Contracts Fixed

K&S Canon assists Seattle and King County businesses with reviewing and updating their contracts to prevent expensive disputes. Our team examines your existing templates, identifies provisions that create problems, and drafts language tailored to your business that actually protects you.

Contact K&S Canon today for a contract review consultation.

Legal Disclaimer: This article provides general information about business contract clauses and should not be considered legal advice. Every case is different. Outcomes depend on specific facts and circumstances. For advice about your situation, contact a licensed attorney in your state.