Contract Review

Contract Review Skill

Review legal contracts for risks, extract key terms, and suggest redlines. Built on the CUAD dataset (41 risk categories), ContractEval benchmarks, and LegalBench.

When to Activate

• User mentions "review contract", "analyze agreement", "check this contract"
• User uploads or references a PDF/DOCX legal document
• User asks about specific clauses, risks, or terms

Step 1: Pre-Review Checklist

Before analyzing content, verify document completeness:

• Blank fields: Flag any "$X", "TBD", "[amount]", "____" placeholders
• Missing exhibits: List all referenced schedules/exhibits and note which are missing
• Signature status: Draft or already executed?
• All pages present: Check for truncation or missing sections

If blank fields or missing exhibits exist, flag prominently in output header.

Step 2: Identify Document Type & User Position

Ask if unclear: "Which party are you? (customer, vendor, buyer, seller, licensor, licensee, receiving party, disclosing party)"

This affects what's "risky":

• Customer reviewing vendor agreement → flag vendor-favorable terms
• Vendor reviewing own template → flag customer-favorable terms
• Buyer in M&A → flag seller-favorable terms
• Seller in M&A → flag buyer-favorable terms
• Receiving party in NDA → flag disclosing party-favorable terms

Assess power dynamic:

• Startup vs. large enterprise? (limited negotiating leverage)
• Standard form vs. negotiated? (some terms non-negotiable)
• Regulated industry? (some terms legally required)

Output Format

Use markdown for readable, scannable output. Do NOT use XML tags.

Example Output

# Contract Review: [Document Name]

**Document Type:** SaaS Subscription Agreement
**Your Position:** Customer
**Counterparty:** Acme Software Inc.
**Risk Level:** 🟡 Medium
**Document Status:** Draft / Executed on [date]

## ⚠️ Pre-Signing Alerts

- **Blank field:** Fee amount in Section 4.1 is "$____"
- **Missing exhibit:** Exhibit B (SLA) referenced but not attached

## Executive Summary

Standard vendor agreement with some one-sided terms. The 3-month liability cap and
asymmetric termination rights need attention. Data ownership is clear.

---

## Key Terms

| Term | Value | Location |
|------|-------|----------|
| Initial Term | 12 months | Section 8.1 |
| Auto-Renewal | 12-month periods, 60-day notice | Section 8.2 |
| Liability Cap | 3 months' fees | Section 10.2 |
| Governing Law | Delaware | Section 12.1 |

---

## Red Flags (Quick Scan)

| Flag | Found | Location |
|------|-------|----------|
| Liability cap < 6 months | ⚠️ Yes | Section 10.2 |
| Uncapped indemnification | No | — |
| Unilateral amendment rights | ⚠️ Yes | Section 14.1 |
| No termination for convenience | No | — |
| Perpetual obligations | No | — |
| Offshore jurisdiction | No | — |

---

## Risk Analysis

### 🔴 Critical

**Limitation of Liability** (Section 10.2)
> "Liability shall not exceed fees paid in the preceding three (3) months"

- **Issue:** 3-month cap is below market standard (typically 12 months)
- **Risk:** For $120K annual contract, liability capped at $30K
- **Market Standard:** 12 months' fees
- **Negotiability:** Medium — most vendors accept 6-12 months
- **Redline:** Change "three (3) months" → "twelve (12) months"
- **Fallback:** Accept 6 months as compromise

---

### 🟡 Important

**Termination for Convenience** (Section 8.5)
> "Vendor may terminate for any reason upon 30 days notice"

- **Issue:** One-sided; customer lacks equivalent right
- **Market Standard:** Mutual termination rights
- **Negotiability:** High — reasonable ask
- **Redline:** Add "Either party may terminate..." or change to "90 days"

---

### 🟢 Reviewed & Acceptable

| Category | Status | Notes |
|----------|--------|-------|
| Data Ownership | ✓ | Customer owns all customer data |
| IP Rights | ✓ | Clear separation, no broad assignment |
| Confidentiality | ✓ | Mutual, 3-year term, standard exceptions |
| Governing Law | ✓ | Delaware — neutral for commercial |

---

## Missing Provisions

| Provision | Priority | Why It Matters |
|-----------|----------|----------------|
| Data Export Rights | Critical | No guaranteed way to get data out on termination |
| SLA Credits | Important | 99.9% uptime stated but no remedy for breach |
| Price Increase Cap | Important | Renewal pricing uncapped |

**Suggested language for Data Export:**
> "Upon termination, Vendor shall make Customer Data available for export in CSV or JSON format for 90 days at no additional charge."

---

## Internal Consistency Issues

- ⚠️ Section 5.2 references "Exhibit C" but no Exhibit C exists
- ⚠️ "Confidential Information" defined in Section 3.1 but used lowercase in Section 7

---

## Negotiation Priority

| # | Issue | Ask | Negotiability |
|---|-------|-----|---------------|
| 1 | Liability cap | 12 months | Medium |
| 2 | Termination rights | Mutual | High |
| 3 | Data export | Add provision | High |
| 4 | Price cap | 5% annual max | Medium |

---

*This review is for informational purposes only. Material terms should be reviewed by qualified legal counsel.*

Red Flags Quick Scan

Check these danger signs FIRST before deep analysis:

Document Type Checklists

NDA Checklist

SaaS/MSA Checklist

Payment/Merchant Agreement Checklist

M&A Agreement Checklist

Finder/Broker Agreement Checklist

Risk Categories (CUAD 41 + Extensions)

Document Basics

• Document Name and Type
• Parties (legal names, roles)
• Agreement Date / Effective Date
• Expiration Date
• Renewal Terms
• Document Status (draft/executed)
• Blank Fields / Placeholders

Term & Termination

• Contract Term / Duration
• Termination for Convenience
• Termination for Cause
• Post-Termination Services
• Survival Clauses
• Suspension Rights (immediate vs. with notice)
• Cure Periods

Assignment & Control

• Anti-Assignment Clause
• Change of Control
• Consent Requirements
• Asymmetric Assignment (they can, you can't)

Financial Terms

• Payment Terms
• Price Restrictions / Adjustments
• Most Favored Nation (MFN)
• Minimum Commitment
• Volume Restrictions
• Audit Rights
• Price Escalation Caps
• Reserve/Holdback Requirements
• Auto-Debit Authority

Liability & Risk

• Limitation of Liability
• Cap on Liability
• Uncapped Liability Carve-outs
• Indemnification
• Insurance Requirements
• Warranty Duration
• Warranty Disclaimer (As-Is)
• Exclusive Remedy Clauses
• Chargeback/Return Liability

IP & Confidentiality

• IP Ownership Assignment
• License Grant
• Affiliate License - Licensor/Licensee
• Covenant Not To Sue
• Non-Compete
• Non-Solicitation (Employees/Customers)
• Competitive Restriction Exception
• Exclusivity
• Non-Disparagement
• Confidentiality Duration
• Third Party Beneficiary
• Residuals Clause
• Feedback Ownership

Dispute Resolution

• Governing Law
• Jurisdiction / Venue
• Arbitration vs Litigation
• Jury Trial Waiver
• Class Action Waiver
• Offshore Jurisdiction Flags

Special Provisions

• ROFR / ROFO / ROFN
• Revenue/Profit Sharing
• Joint IP Ownership
• Source Code Escrow
• Irrevocable or Perpetual License
• Data Export Rights
• Uptime/Availability SLA
• Sublicensing Rights
• Unilateral Amendment Rights

Market Standard Benchmarks

Negotiability Guide

Power dynamic factors:

• Large customer + small vendor = more leverage
• Startup + enterprise vendor = less leverage
• Competitive market = more leverage
• Sole-source vendor = less leverage
• Regulated terms = no leverage (legally required)

Jurisdiction Notes

Non-Competes:

• California, North Dakota, Oklahoma, Minnesota: Generally void
• Other states: Reasonableness test applies

Choice of Law:

• Delaware: Corp-friendly, predictable
• New York: Financial agreements, sophisticated courts
• California: Employee-friendly, tech industry
• BVI/Cayman: Offshore, expensive to litigate, potential red flag

Arbitration Venues:

• AAA, JAMS: Standard US commercial
• SIAC (Singapore), LCIA (London): International, expensive
• Mandatory + class waiver: Limits remedies significantly

Guardrails

• Not legal advice: Recommend attorney review for material terms
• Not tax advice: Flag but don't opine
• Jurisdiction matters: Note when enforceability varies
• Express uncertainty: Say when interpretation is unclear
• No hallucination: Only reference text actually in document
• Show what's acceptable: Always include "Reviewed & Acceptable" section
• Document status matters: Note if already executed (review is informational)