Red Flag Detection

Red Flag Detection

Scan the agreement for "$ARGUMENTS" to identify high-risk clauses and non-standard terms. Systematically check for common contractual red flags and score each finding using a RAG (Red/Amber/Green) framework.

Note: AI-generated legal content does not constitute legal advice. Consult a qualified attorney.

Prerequisites

Check that .metapowers/legal/$ARGUMENTS/00-assess.md exists. If it does not exist, stop and tell the user:

"Run an Assess skill first (e.g. /legal:risk-assessment $ARGUMENTS) to generate the prerequisite assessment artifact."

If the user passes --skip-checks, bypass this check and log the skip to .metapowers/legal/$ARGUMENTS/skip-log.md with a timestamp and the reason "Prerequisite check skipped for red-flag-detection".

Process

1. Read inputs:

   • Read .metapowers/legal/$ARGUMENTS/00-assess.md for risk and jurisdiction context
   • Read the agreement from the source provided by the user

2. Scan systematically for red flags across categories:

   Liability and Indemnification:

   • Unlimited liability exposure (no cap on damages)
   • Broad indemnification obligations (disproportionate to party's role)
   • Missing limitation of liability cap
   • Indemnification for third-party claims without control of defense

   Amendment and Renewal:

   • Unilateral amendment rights (one party can change terms without consent)
   • Automatic renewal with penalty (difficult or costly to exit)
   • Silent renewal clauses with short opt-out windows

   Restrictive Covenants:

   • Non-compete overreach (excessive scope, geography, or duration)
   • Non-solicit provisions extending beyond reasonable limits
   • Exclusivity requirements disproportionate to the relationship

   Intellectual Property:

   • IP assignment beyond the scope of work
   • Overly broad license grants (perpetual, irrevocable, sublicensable)
   • Missing background IP carve-outs
   • Work-for-hire misclassification

   Termination:

   • One-sided termination rights (asymmetric rights favoring counterparty)
   • Termination for convenience without reasonable notice
   • Punitive post-termination obligations

   Data and Audit:

   • Ambiguous data ownership provisions
   • Unreasonable audit rights (scope, frequency, cost allocation)
   • Missing data breach notification requirements

   Dispute Resolution:

   • Missing governing law clause
   • Missing dispute resolution mechanism
   • Mandatory arbitration with unfavorable forum or rules
   • Class action waiver in consumer contracts

3. RAG score each finding:

   • Red — immediate risk requiring resolution before signing; material exposure
   • Amber — should be negotiated; risk is manageable but not ideal
   • Green — acceptable; standard or low-risk provision

4. Summarize overall risk profile:

   • Count of Red/Amber/Green findings
   • Overall recommendation (sign/negotiate/walk away)
   • Priority-ordered list of items to address

5. Write the artifact to .metapowers/legal/$ARGUMENTS/02-review.md with frontmatter:

   ---
   description: Red flag detection for $ARGUMENTS
   ---
   

   Include sections:

   • Scan Summary — total findings by RAG category
   • Red Flags — all Red-scored items with clause reference, risk explanation, and recommended action
   • Amber Items — all Amber-scored items with clause reference and negotiation suggestion
   • Green Items — all Green-scored items (brief confirmation)
   • Overall Risk Profile — aggregate assessment and recommendation
   • Priority Action List — ordered items to address before execution

Output

The red flag analysis written to .metapowers/legal/$ARGUMENTS/02-review.md. Present a summary to the user highlighting:

• Total Red/Amber/Green count
• All Red-flagged items with brief risk descriptions
• Overall recommendation (sign, negotiate, or walk away)
• Top 3 priority items to address