Florida Commercial Contract Review: 8 Clauses That Decide Who Pays

A contract review is not a proofread. It is a risk allocation exercise. The question on every page is the same: if this deal goes sideways, who absorbs the loss, who gets to walk away, and who pays the lawyers. Florida statutes answer some of those questions for you whether your contract addresses them or not, which is exactly why a template pulled from another state can quietly fail here.

The eight items below are where Florida businesses most often give away position without realizing it. None of this is legal advice for your specific agreement, and none of it substitutes for having a Florida attorney read the actual document. It is a map of where to look first.

A limitation of liability clause caps what the other side can recover from you, and what you can recover from them. Two numbers matter: the cap itself, and what sits outside it. A cap set at fees paid in the preceding twelve months looks reasonable until you realize a data breach, an IP infringement claim, or a gross negligence finding may be carved out and uncapped.

Read the exclusions of consequential damages closely. Lost profits are usually the largest real-world loss a business suffers, and they are usually the first category excluded. If your commercial exposure sits in lost revenue rather than direct cost, a mutual consequential damages waiver may hand the drafting party a significant advantage while appearing perfectly balanced.

Indemnity clauses are where one-sided drafting hides best. Check three things. First, the trigger: does the obligation arise on a claim being asserted, or only on a judgment or settlement? Claims-based triggers activate far earlier and far more often. Second, the scope: an indemnity covering claims “arising out of or relating to” the agreement is materially broader than one limited to breach of the agreement. Third, control: whoever controls the defense controls the settlement, and an indemnitor with control can settle in a way that suits its own interests rather than yours.

Florida construction contracts carry additional statutory limits on indemnification, and provisions that attempt to shift liability for another party’s own conduct are read narrowly by Florida courts. If your agreement asks you to indemnify someone against their own negligence, that clause deserves attorney review before signature, not after a claim.

Florida follows the American Rule: each side pays its own legal fees unless a statute or contract says otherwise. That makes the fee clause one of the highest-leverage terms in any commercial agreement, because it determines whether a dispute is economically worth pursuing at all.

Here is the Florida-specific wrinkle. Under section 57.105(7), Florida Statutes, a one-way fee provision does not stay one-way. If a contract allows attorney’s fees to one party when that party must take action to enforce the contract, a court may also award reasonable fees to the other party when that other party prevails, whether as plaintiff or defendant. The statute applies to contracts entered into on or after October 1, 1988.

Two practical consequences. If you are handed a vendor form with a fee clause running only to the vendor, Florida law may already have made it reciprocal in your favor. And if you are the drafting party assuming a one-way clause deters claims, that assumption may not hold in a Florida forum. Note also that Florida courts have held section 57.105(7) applies only to genuinely unilateral provisions; where a contract already grants both sides fees, the contract language controls.

Termination rights are frequently asymmetric. One side gets termination for convenience on thirty days’ notice; the other gets termination only for uncured material breach after a sixty-day cure period. That is not a drafting oversight. It is the deal.

Check the renewal mechanism separately. Evergreen clauses with a short non-renewal notice window are a common source of unintended multi-year commitments, particularly in supply, software, and equipment agreements. If the notice window is a thirty-day period ending ninety days before the anniversary, that date belongs in a calendar the day the contract is signed, not in a folder.

Then check what survives termination. Confidentiality, indemnity, limitation of liability, IP assignment, and dispute resolution provisions usually survive. Payment obligations sometimes do not, and that omission can be worth negotiating.

Payment terms are a financing arrangement dressed as administration. Net 90 with an acceptance-based trigger means you are funding the counterparty’s working capital, and the acceptance step gives them a unilateral lever to delay the clock.

In construction and subcontract work, look specifically at whether payment is conditioned on the upstream party being paid. A pay-when-paid provision generally affects only the timing of payment; a pay-if-paid provision attempts to shift the entire risk of owner non-payment down the chain. Florida courts require clear language before reading a clause as a true condition precedent, so the difference between the two often turns on a handful of words.

Also confirm what happens on late payment: interest rate, suspension rights, and whether you may stop work without that suspension itself becoming a breach.

A Florida business that signs a contract governed by another state’s law and requiring litigation in that state’s courts has accepted a real cost, even in a dispute it wins. Travel, local counsel, and unfamiliar procedure all price into the decision of whether to enforce your rights at all. That is usually the point.

Separate the three concepts, because they are frequently conflated: governing law decides which state’s substantive rules apply, venue decides where the case is heard, and the dispute resolution clause decides whether it is heard by a court or an arbitrator. A contract can specify Florida law and still require arbitration in Delaware.

On arbitration, weigh it rather than assuming it is cheaper. Arbitration limits discovery and appeal rights and adds arbitrator fees. For low-value, high-volume disputes that trade-off often favors you. For a single high-value claim where you need documents from the other side, it often does not.

This is the area of Florida contract law that has changed most recently, and templates written before mid-2025 are now out of date.

Section 542.335, Florida Statutes, remains the general framework. It requires a restrictive covenant to be in writing and signed by the person against whom enforcement is sought, requires the party seeking enforcement to prove one or more legitimate business interests, and requires the restriction to be reasonable in time, geographic area, and line of business.

Sitting alongside it, the Florida CHOICE Act (HB 1219, creating sections 542.41 through 542.45) took effect on July 1, 2025. It does not replace section 542.335. It creates an additional, more employer-favorable route for a defined category of high-earning employees and contractors, broadly those earning more than twice the annual mean wage in the relevant Florida county. For covered individuals, non-compete and garden leave arrangements can run up to four years, are presumed enforceable, and carry stronger injunctive remedies. The Act also imposes procedural requirements, including notice of the right to seek counsel and a seven-day review period before signing, and it excludes certain health care practitioners.

Practical effect for Florida employers: your existing non-compete template almost certainly does not meet the CHOICE Act’s procedural conditions, because it was drafted before they existed. Everyone outside the covered category still falls under section 542.335, where reasonableness in time, area, and line of business continues to govern.

For technology, engineering, and product businesses this is the clause with the longest tail. Two failure modes recur.

The first is vendor and contractor work where the agreement is silent on ownership, or grants only a license, so the party who paid for the development does not own it. Copyright in commissioned work does not automatically transfer by paying an invoice, and the narrow statutory categories of work made for hire rarely cover custom software or engineering deliverables. Ownership needs an express written assignment.

The second is employee-generated IP without invention assignment language, which can leave ownership of work created by your own staff genuinely disputable. For a company whose valuation rests on its patent portfolio or codebase, that is a diligence problem discovered at the worst possible moment.

Check also that any license grant back to a vendor is limited. A broad grant permitting the vendor to use your data or derived materials to improve its own products is now standard in many technology agreements and is often negotiable.

A strong contractual position is worth nothing after the clock runs. These Florida limitation periods sit behind every commercial agreement:

Limitation periods can be tolled or altered by circumstance, and the correct classification of a claim decides which period applies. Treat the list as a prompt to check the date, not as a determination about your matter.

Not every agreement justifies attorney review. A useful threshold: review the contract if a dispute under it could threaten a quarter of revenue, if the term exceeds twelve months, if it transfers or licenses intellectual property, if it contains a personal guarantee, or if the counterparty drafted it and refuses redlines. A master agreement deserves more scrutiny than any individual purchase order, because a single unfavorable term in an MSA repeats across every transaction that follows for years.

Reviewing terms before signature consistently costs a fraction of litigating them afterwards. That is not a sales argument, it is arithmetic: negotiation happens once, at a known cost, while a dispute runs on an open-ended clock with an uncertain outcome.

For the full range of commercial agreements we handle, including master supply agreements, NDAs, licensing, leases, construction contracts, and employment documents, see our Commercial Contracts & Business Agreements practice page. For software, data, and AI-specific terms, see SaaS & Technology Agreements.