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Written by Timothy Perry January 23, 2026

Hidden Risks in “Standard” Business Agreements

Most business disputes don’t start with shouting, threats, or lawsuits. They start much more quietly—with a signature and a prayer.

A “standard” contract. A template pulled from the internet. A document someone says they’ve “used for years.” Maybe a few friendly emails to confirm the deal. Everyone’s excited, optimistic, and focused on growth. Lawyers feel like a speed bump.

Until something goes wrong.

At Taibi Law Group, we see this pattern repeatedly: smart, capable people enter into business relationships with good intentions—and end up in litigation not because anyone set out to deceive, but because the contract quietly allocated risk in ways no one fully understood.

In North Carolina, as in most states, courts enforce contracts exactly as written.

STANDARD DOES NOT MEAN SAFE

Clients often say: 'But it was just a standard agreement.'

That phrase has no legal meaning.

North Carolina courts generally assume adults who sign contracts mean what they sign. Judges aren't in the business of rewriting deals because one side didn’t read—or didn’t appreciate—the consequences of a clause buried in the fine print. Some of the most dangerous provisions are also the most boring-sounding. They may even be in French or Latin rather than English. The last one sounds like something you'd treat with penicillin.

Common clauses that can pack a punch:

• Choice of law and venue clauses
• Limitation of liability provisions
• Indemnification clauses
• Buy-sell or forfeiture provisions
• Force majeure
• Mutatis mutandis

These are often dismissed as 'boilerplate.' In litigation, they are anything but.

Consider: The Restaurant That Fell Apart

Three partners buy a restaurant together. One manages daily operations—staffing, vendors, health inspections, payroll. The other two contribute capital and check in occasionally.

The operating agreement is a template. Everyone signs.

Two years later, they are making a good profit, but revenues take a dip. The non-operating partners vote to remove the managing partner. The agreement allows it—by majority vote. Worse, it includes a provision stating that a removed member forfeits future profit participation and is bought out at book value, not fair market value.

The managing partner—who worked 70-hour weeks—walks away with a fraction of what the restaurant is worth.

No fraud. No theft. Just a contract doing exactly what it said it would do.

How About: The Founder Who Did the Work and Got Cut Out
A founder designs the product, writes the code, manages development, and pitches customers. Other partners provide capital but do not work day to day.

The company used a “standard” operating agreement. It included broad termination rights and vesting provisions, which meant the founder would earn full ownership gradually over time. The agreement did not clearly address compensation for work if the relationship ended early.

When disagreements arose, the working founder was removed. Their equity never fully vested, and their compensation for years of labor was undefined—or expressly waived.

From a legal standpoint, the investors may have been within their contractual rights. From a human standpoint, it felt like a gut punch: the person who did all the work walked away with far less than expected.

WHY THIS MATTERS IN NORTH CAROLINA

North Carolina courts emphasize freedom of contract, plain-language enforcement, and predictability over equity. If a contract is clear, courts are reluctant to rescue parties from a bad deal.

That means the risk is front-loaded. The time to protect yourself is before the dispute—not after.

THE REAL PROBLEM ISN’T TRUST—IT’S ASSUMPTIONS

Most clients trusted the other party. That trust isn’t always misplaced—but it is often incomplete.

They assumed:

“We’ll work it out if something happens.”

“That clause would never be enforced.”

“This is just a formality.”

Contracts exist for the moment when trust breaks down. When that moment comes, the contract—not the handshake—controls.

A SMARTER WAY TO THINK ABOUT CONTRACTS

You don’t need to negotiate every clause. But you do need to understand:

What happens if the relationship ends early

Who controls key decisions

How value is calculated if someone exits

Where disputes are resolved

A short legal review before signing is often far less expensive than litigation later.

The most dangerous contracts aren’t written by bad actors. They’re signed by good people who didn’t realize what they were agreeing to.

If you’re entering a business relationship—especially one involving shared ownership or unequal labor contributions—it’s worth asking a simple question: What does this contract actually do if things go sideways?

Many people believe it won’t happen to them. After all, they’re going into business with a brother, a spouse, a parent, a longtime friend, or someone they trust deeply. Yet some of the hardest-fought and most contentious business litigation we see involves exactly those kinds of relationships.

Nearly forty percent of business partnerships are dissolved or otherwise fail within the first three years. None of those parties entered their agreements expecting anything other than success. But for those who had the foresight to draft a custom contract that clearly defined rights, obligations, and exit scenarios, a business deal going south did not have to mean personal or financial devastation.