A Guide to Common Pitfalls, Risk Prevention, and Legal Risk Avoidance in U.S. Surrogacy Contracts

Intended parents and the surrogate must each retain a completely independent, actively practicing attorney. They must never share the same attorney, nor use a legal team "bundled" and recommended by the agency. This effectively avoids conflicts of interest, ensures the contract terms are fair and impartial, and prevents biased outcomes in future medical decisions or fee disputes.

In RSMC's standard process, both attorneys review and revise the contract independently, and neither party may use the other's attorney. The fundamental purpose is to avoid clauses designed in favor of one side due to conflicts of interest. This ensures that in the event of medical decision disagreements (such as fetal reduction or delivery method choices) or fee disputes, the rights of intended parents are not diluted by agency relationships.

All surrogate compensation, medical reimbursements, and other payments must be made through an independent third-party escrow account according to milestones. Never pay the surrogate directly in cash or via private transfers; otherwise, in the event of a breach or dispute, your funds lose traceability and protection.

A rigorous escrow fulfillment process includes: after contract signing, the intended parents deposit the first payment into a third-party escrow account; the escrow company releases funds in batches according to gestational milestones confirmed by both attorneys; every disbursement is documented in writing with both parties' confirmation. All medical expenses, surrogate compensation, attorney fees, and insurance premiums are transferred through the escrow account, eliminating cash payments or private transfers to prevent fund misappropriation, muddy accounting, and related legal and tax disputes.

U.S. states have widely varying legal attitudes toward surrogacy. Parentage determinations (e.g., Pre-Birth Orders, PBOs) depend heavily on the legal practice of the surrogate's state of residence and the state of delivery. An actively practicing attorney must evaluate each case based on your specific family structure — do not blindly copy "most friendly state" lists found online.

Some states require judicial pre-review before embryo implantation; some states impose additional restrictions on international intended parents; and others have additional hurdles for single individuals or LGBTQ+ families in parentage recognition. Therefore, when selecting a surrogate, you should evaluate not only her physical condition but also the friendliness and case maturity of the courts in her state of residence. California is widely recognized as one of the most mature surrogacy law states in the U.S., which is why RSMC has placed its legal coordination center in California.

The contract must clearly establish whether the surrogate's existing medical policy contains a "surrogacy exclusion clause," and promptly arrange dedicated commercial insurance covering pregnancy complications, accidents, life, and disability — avoiding the extreme risk of a six-figure medical bill falling on nobody.

Clinically, it is common for a surrogate's health insurance to cover "maternity" but have an exclusion clause explicitly stating "surrogacy excluded," leaving huge medical bills unassigned. RSMC requires insurance review specialists to interpret the surrogate's policy line by line; once an exclusion clause is found, a backup commercial insurance plan is immediately activated, and high-risk medical items such as NICU for the newborn are included in the contingency plan, ensuring coverage from transfer through postpartum.

The areas most prone to ambiguity in a contract are fee categories and refund terms. RSMC uses a transparent all-inclusive price model: the basic Fixed-Cost Plan is priced at $145,650 in 2026, covering the basic costs of one complete surrogacy cycle; the Birth Assurance Plan is priced at $202,000, covering unlimited embryo transfers and surrogate replacements until you successfully bring your baby home.

The contract must itemize which fees are refundable and which are non-refundable, to avoid disputes caused by inconsistencies between verbal promises and contract terms. Before signing, have your attorney confirm the refund scope item by item, and be especially wary of vague "service fees are non-refundable" statements.

The contract should clearly specify the governing law and dispute resolution mechanism — for example, negotiation between attorneys first, followed by arbitration or litigation if negotiation fails. Breach clauses should also be included, such as liability for a surrogate unilaterally terminating the pregnancy or intended parents failing to pay compensation on time.

A common trap is clauses that only state "the parties should negotiate in good faith" without specifying the arbitration venue, governing court, or compensation standards, making enforcement impossible when disputes arise. A mature contract should provide a preset track for every foreseeable risk rather than leaving room for post-hoc arguments.