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26-Clause Red Flag Guide ← The Gatehouse

The Gatehouse · Pre-Commitment Risk Control

26-Clause Commercial Red Flag Guide

The alignment check you run before you sign — for any Australian business owner, in any industry.

Pass 0 Flag 0 Review 0 Unmarked 26

You are the person who reads the deal before the deal reads you. These 26 clauses are CBB’s site-wide pre-commitment alignment check — run it on any significant agreement before you commit margin, cash flow, or reputation.

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Who this is for

Any business owner who signs commercial agreements — trade and civil contractors, professional services, retail and hospitality, manufacturing, suppliers, tech, and everyone in between.

When to use it

Before you sign anything that matters: client contracts, supplier agreements, subcontracts, partnerships, service deals, equipment hire, or any commercial arrangement big enough to hurt if it goes wrong.

How to use the 26 clauses

Quick scan (~15 minutes)

Run the Top 10 margin-killers below and every High severity clause against the document in front of you.

Full review

Work through all 26. Mark each clause Pass, Flag, or Needs review. Use the questions as your negotiation list.

The Four Gates

Enter

Who you’re dealing with — entity, authority, term, change of control, power balance.

Understand

What you agreed — scope, price, IP, confidentiality, compliance, document precedence.

Deliver

What it takes to perform — deposits, variations, subcontracting, warranties, insurance.

Downside

When it goes wrong — termination, liability, indemnities, guarantees, disputes, exit.

Disclaimer

This is a practical risk tool, not legal advice. It does not make your business compliant with any law or regulation. Significant agreements need a qualified Australian lawyer. Employment contracts, residential leases, and regulated financial products sit outside this guide.

Several clauses touch areas where the law is complex, high-stakes, or fact-specific — including privacy and data (13), personal guarantees (14), restraints (17), compliance with laws (22), and unfair terms (26). Clauses marked Lawyer review below flag those areas. Do not rely on this guide for enforceability, voidness, penalties, or regulatory compliance; get current advice before you sign.

Part Two

The 26 Clauses

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Quick Reference

Top 10 clauses that kill margin

  1. Scope (2) — undefined scope is unlimited scope.
  2. Price & payment (3) — profit you can’t collect isn’t profit.
  3. Deposits (4) — no deposit means you finance their job.
  4. Variations (5) — unpriced changes are free work.
  5. Termination (7) — they walk, you wear stranded cost.
  6. Liability caps (8) — uncapped exposure on a small deal.
  7. Indemnities (9) — losses you didn’t cause.
  8. Personal guarantees (14) — company risk becomes your home.
  9. Set-off (19) — cash held on an allegation.
  10. Penalties & LDs (20) — penalised for delays you didn’t cause.

Walk away · Negotiate · Accept with eyes open

Walk away

Deal lopsided throughout, fatal clause won’t move, or fixes won’t go in writing.

Negotiate

Problem is a term, not the whole deal. Use the clause questions as your list.

Accept with eyes open

Risk is real but priced and worth it — a choice made knowingly.