Business Contracts: Common Clauses That Could Cost You (and How to Fix Them)

Eugene Strupinsky • February 27, 2026

Clear and comprehensive business contracts are essential for successful operations, yet many companies in New York find themselves facing avoidable risks due to ambiguous or unfavorable clauses. Without vigilant legal review, these pitfalls can affect businesses across Brooklyn and beyond, potentially exposing owners to unnecessary liability, expensive litigation, or disrupted operations. Understanding the most problematic provisions, especially indemnity, termination, non-compete, and confidentiality, is critical to safeguarding your organization's interests.

Indemnity Clauses: Transferring the Real Risk

Indemnity clauses are designed to allocate risk, commonly requiring one party to compensate the other for certain losses or damages. However, businesses often overlook language that is excessively broad or one-sided. For example, a vendor agreement might state that your business must indemnify the other party for "all claims arising out of the agreement," regardless of fault. This can create unexpected liability, especially if the incident arises from circumstances beyond your control.

Legal review can flag these issues. Working with a business contract attorney in New York ensures the indemnity language is fair, specifically tailored, and aligned with your interests. Businesses can often negotiate for indemnities limited to negligence or misconduct, not all-encompassing risk.

Termination Provisions: Avoiding Commercial Disruption

Termination clauses should clearly define the circumstances and procedures for ending a contract. Without clear language, your company could face sudden loss of a key supplier or client, jeopardizing cash flow and supply chains. For instance, a contract granting a vendor the right to terminate "for any reason" with minimal notice puts your planning at risk.

A thorough contract review by legal counsel helps identify ambiguous or unfavorable termination conditions. Legal professionals typically recommend including reasonable notice periods, defining acceptable grounds for termination, and outlining specific remedies for breach. Such clarity ensures more predictable business relationships and operational stability.

Non-Compete Restrictions: Balancing Protection and Compliance

Non-compete clauses aim to prevent former employees or contractors from working with competitors or starting a similar business. In New York, these provisions face scrutiny by courts and regulators, especially when they are overly broad in scope, geography, or duration. For example, a non-compete restricting employees from working "anywhere in the United States" for multiple years may not be enforceable.

To comply with New York law and avoid litigation, your agreements should set reasonable limits tailored to your legitimate business interests. Legal professionals reviewing these contracts can provide guidance on enforceability and ensure compliance with the latest regulations, reducing the risks of costly disputes.

Confidentiality Clauses: Securing Sensitive Information

Confidentiality provisions safeguard proprietary business information, client data, and intellectual property. However, businesses sometimes use generic templates that lack specificity, leaving loopholes that undermine protection. For instance, a vague definition of what constitutes "confidential information" could leave valuable assets unprotected or lead to disagreement about disclosure.

A precise confidentiality agreement, reviewed and customized by a legal professional, defines the scope of protection, duration, and permitted exceptions. This strengthens your protection against misuse of sensitive information, which is especially important for companies handling client data related to business law services or when negotiating commercial dispute resolution.

Why Legal Review is Crucial for New York Businesses

Routine contract audits and legal support by a trusted attorney can make the difference between a safeguard and a source of costly litigation. In New York's fast-moving and competitive business environment, legal professionals not only help identify problematic clauses but also support negotiation and amendment of agreements to fit your unique needs. Seasonal contract renewals or changes in regulations, such as updates to employment or privacy laws, are critical moments to revisit agreements with a qualified legal team. This prevention-first approach can save substantial resources in the long run.

Contact Khalifeh & Strupinsky, P.C. for a Contract Consultation

If your business is located in Brooklyn or anywhere in New York, it is vital to protect your company with thorough contract review. Khalifeh & Strupinsky, P.C. provides experienced counsel on business contract drafting and review, ensuring your agreements work in your favor and reduce legal risk. To schedule a consultation, call 917-717-5007 or complete our online form. Our team is ready to help your business thrive with stronger and more reliable contracts.

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Are Communications with AI Privileged?: Judge Rakoff delivers opinion in United States v. Heppner

By Kayla Gaisi • March 10, 2026

As generative AI becomes increasingly integrated into our daily lives, it continues to raise legal questions that courts can no longer ignore. This month, the question of whether communications between criminal defendants and public AI are protected from government inspection was answered by Judge Jed Rakoff. That answer was an unequivocal 'no.' In the case at hand, defendant Bradely Heppner was charged with fraud and arrested a month later, in November 2025. When the FBI executed a search warrant at his home, they seized documents containing communications between him and the public AI platform Claude AI. According to Heppner's counsel, these communications reflected a defense strategy Heppner had generated in anticipation of potential indictment. Heppner asserted that these documents were either protected under attorney-client privilege or by the work product doctrine, arguing that he had used Claude for the purpose of obtaining legal advice and had shared these outputs with his attorneys. However, Judge Rakoff rejected both arguments. Attorney-client privilege applies only to communications between a client and a professional who owes them fiduciary duties and is subject to discipline. It is a socially valuable human relationship. Regardless of how advanced an AI systems is, it cannot meet this definition. Claude is not a human attorney and does not have an attorney-client relationship with its users, so communications with it cannot qualify for attorney-client privilege. Aside from this, Rakoff listed other reasons why Heppner's communications with Claude are not considered confidential. Firstly, Claude is a public AI system whose privacy policy discloses that communications can be shared with third parties including "governmental regulatory authorities." Secondly, as his counsel admitted, Heppner sought legal advice from Claude on his own volition, not at their direction. Even if Heppner received legal advice and later shared that with his counsel, that does not render the initially unprivileged communication privileged. The related work product doctrine fared no better for Heppner. This doctrine protects materials prepared by attorneys in anticipation of litigation from discovery by opposing parties. Here, the AI-generated documents were not prepared by or at the behest of counsel and did not reflect counsel's strategy. Thus, they fell outside the scope of the doctrine. Judge Rakoff's ruling matters because it maintains the narrowness of evidentiary privileges that is necessary for protecting the judicial system's truth-seeking function. Extending privilege to communications with public AI systems could create a dangerous loophoole, one where parties could shield discoverable information by filtering it through a chatbot. But given Rakoff's ruling, the main takeaway here is that attorneys should explicitly advise their clients not to share personal or legal information with public AI systems. Despite how routine it has now become for many to ask public AI personal questions, these communications are not confidential, and may ultimately be used as evidence in court.