Employment Contract Red Flags: 7 Clauses to Catch Before You Accept
Updated July 27, 2026 · By the makers of Contract Analyzer: AI Review
You negotiated the salary. Then the contract arrives, and the real terms live in clauses nobody discussed in the interviews. Most employment contracts are standard; the point of reviewing yours is to find out whether it is one of the exceptions before you resign from your current job.
The seven clauses to read closely
- Non-compete: how long, what geography, what counts as a competitor; a broad one can lock you out of your own field
- IP assignment: does it claim only work you do for them, or "all inventions during employment", which captures your side projects
- Bonus and commission: is it a formula or "at the company's discretion"; discretionary means optional
- Termination: notice periods for both sides, and what "for cause" includes; vague cause definitions favor the employer
- Probation: how long, and what rights are reduced during it
- Hours and overtime: "such hours as required" with no overtime terms is worth pricing into your decision
- Repayment clauses: training costs or sign-on bonuses that claw back if you leave early; know the number and the trigger
The side-project trap, specifically
If you build apps, write, consult, or plan to found something someday, the IP clause is the most important paragraph in the contract. Look for language claiming inventions "related to the company's business" or made "using company equipment". Ask to attach an exclusion list of projects you already own; it is a routine request, and a refusal is information.
What is negotiable (more than you think)
Notice periods, non-compete scope, IP exclusions, and repayment triggers get negotiated every day, especially after an offer, when the company has already decided it wants you. That moment, offer in hand, contract unsigned, is the strongest negotiating position most employees ever hold. Use it to fix clauses, not just salary.
Reading it under time pressure
"Please sign by Friday" is common and usually innocent, but it is how bad clauses get through. A structured review, every clause extracted, risks flagged and scored, takes minutes and tells you where to spend your reading time. Deadline pressure is exactly when a systematic pass beats skimming.
Scan the offer with Contract Analyzer
- Upload the contract PDF or photograph the pages.
- Read the clause breakdown; go straight to IP, non-compete, and termination.
- Check the risk flags against the seven clauses above.
- List what to negotiate while you still have the leverage.
For senior roles or unusual terms, bring the analysis to an employment lawyer; it makes the paid hour count.
Download Contract Analyzer on the App StoreThis app provides information, not legal advice. For high-stakes decisions, consult a qualified lawyer in your jurisdiction.