Contract Analysis
Overview
Contract law governs enforceable agreements. This skill covers formation requirements, essential clauses, and common risk areas for business contracts. It is educational guidance, not legal advice — always consult a qualified attorney for specific situations.
Framework
IRON LAW: A Contract Requires Offer + Acceptance + Consideration + Legality
All four elements must be present for a valid contract. Missing any one
means no enforceable contract exists — regardless of how formal the document
looks. A signed document without consideration (exchange of value) is
not a contract.
Contract Formation
| Element |
Definition |
Test |
| Offer |
Clear, definite proposal with intent to be bound |
Would a reasonable person understand this as a binding proposal? |
| Acceptance |
Unqualified agreement to the offer's terms |
Mirror image rule: acceptance must match the offer exactly |
| Consideration |
Something of value exchanged by both parties |
Each side gives up something (money, services, rights, promises) |
| Legality |
Subject matter must be legal and parties must have capacity |
No illegal purpose; parties must be competent adults or authorized entities |
Essential Contract Clauses
| Clause |
Purpose |
Red Flags |
| Parties |
Who is bound |
Incorrect entity name, no authority to sign |
| Scope/Subject |
What is being exchanged |
Vague deliverables, undefined terms |
| Payment terms |
When and how payment occurs |
No payment schedule, no late payment consequences |
| Term & Termination |
Duration and exit conditions |
Auto-renewal without notice, no termination for cause |
| Liability & Indemnity |
Who bears risk |
Unlimited liability, one-sided indemnification |
| Confidentiality (NDA) |
Information protection |
Overly broad definition, no time limit |
| IP ownership |
Who owns created work |
Ambiguous ownership of work product |
| Non-compete |
Restrictions after termination |
Overly broad scope/geography/duration |
| Dispute resolution |
How conflicts are resolved |
Foreign jurisdiction, mandatory arbitration without consent |
| Force majeure |
Excused performance for unforeseeable events |
Too narrow or too broad definition |
Contract Review Steps
- Identify the parties: Who is agreeing? Are entity names correct?
- Understand the deal: What is each side giving and receiving?
- Check formation elements: Offer, acceptance, consideration, legality — all present?
- Review essential clauses: Use the table above as a checklist
- Flag risk areas: Unlimited liability, one-sided terms, vague scope, auto-renewal
- Check governing law: Which jurisdiction's law applies? Is the dispute resolution mechanism acceptable?
Output Format
# Contract Review: {Agreement Type}
## Parties
- Party A: {name, role}
- Party B: {name, role}
## Deal Summary
{What is being exchanged — in plain language}
## Clause Review
| Clause | Present? | Assessment | Risk Level |
|--------|---------|-----------|-----------|
| Scope | Y/N | {notes} | 🟢/🟡/🔴 |
| Payment | Y/N | ... | ... |
| Termination | Y/N | ... | ... |
| Liability | Y/N | ... | ... |
| IP | Y/N | ... | ... |
| Non-compete | Y/N | ... | ... |
## Red Flags
1. {specific concern with clause reference}
## Recommendations
1. {suggested modification}
Examples
Correct Application
Scenario: SaaS service agreement review
- Red flag: "Vendor may modify pricing with 30 days' notice" → One-sided price change clause. Should be: pricing locked for contract term, changes only at renewal.
- Red flag: "Client indemnifies Vendor against all claims" → One-sided indemnification. Should be mutual.
- Missing: No SLA (service level agreement) defined → No recourse if service goes down. Recommend adding uptime commitment with credits ✓
Incorrect Application
- "This contract looks fine because both parties signed it" → Signature doesn't make every clause fair or enforceable. Must review individual clause terms. A signed contract with an unconscionable clause may still be challenged.
Gotchas
- "Standard contract" doesn't mean fair: Vendor-drafted "standard" contracts are drafted in the vendor's favor. Everything is negotiable.
- Taiwan-specific: Taiwan's Civil Code governs contracts. Key differences from common law: no consideration requirement (promise for promise is sufficient), mandatory provisions in certain contract types (labor, consumer).
- Auto-renewal traps: Many contracts auto-renew unless notice is given 30-90 days before expiry. Calendar the notice deadline.
- This skill is NOT legal advice: It provides educational analysis of contract concepts. Always consult a licensed attorney for binding legal decisions.
References
- For Taiwan-specific contract law (Civil Code), see
references/taiwan-contract-law.md
- For common contract templates, see
references/contract-templates.md
1---2name: law-contract3description: "Analyze contract fundamentals including formation requirements (offer, acceptance, consideration), essential clauses, and common risk areas. Use this skill when the user needs to review a contract, understand contract terms, identify risky clauses, or draft contract provisions — even if they say 'review this agreement', 'what should I watch out for in this contract', or 'is this clause standard'.".4---56# Contract Analysis78## Overview910Contract law governs enforceable agreements. This skill covers formation requirements, essential clauses, and common risk areas for business contracts. It is educational guidance, not legal advice — always consult a qualified attorney for specific situations.1112## Framework1314```15IRON LAW: A Contract Requires Offer + Acceptance + Consideration + Legality1617All four elements must be present for a valid contract. Missing any one18means no enforceable contract exists — regardless of how formal the document19looks. A signed document without consideration (exchange of value) is20not a contract.21```2223### Contract Formation2425| Element | Definition | Test |26|---------|-----------|------|27| **Offer** | Clear, definite proposal with intent to be bound | Would a reasonable person understand this as a binding proposal? |28| **Acceptance** | Unqualified agreement to the offer's terms | Mirror image rule: acceptance must match the offer exactly |29| **Consideration** | Something of value exchanged by both parties | Each side gives up something (money, services, rights, promises) |30| **Legality** | Subject matter must be legal and parties must have capacity | No illegal purpose; parties must be competent adults or authorized entities |3132### Essential Contract Clauses3334| Clause | Purpose | Red Flags |35|--------|---------|-----------|36| **Parties** | Who is bound | Incorrect entity name, no authority to sign |37| **Scope/Subject** | What is being exchanged | Vague deliverables, undefined terms |38| **Payment terms** | When and how payment occurs | No payment schedule, no late payment consequences |39| **Term & Termination** | Duration and exit conditions | Auto-renewal without notice, no termination for cause |40| **Liability & Indemnity** | Who bears risk | Unlimited liability, one-sided indemnification |41| **Confidentiality (NDA)** | Information protection | Overly broad definition, no time limit |42| **IP ownership** | Who owns created work | Ambiguous ownership of work product |43| **Non-compete** | Restrictions after termination | Overly broad scope/geography/duration |44| **Dispute resolution** | How conflicts are resolved | Foreign jurisdiction, mandatory arbitration without consent |45| **Force majeure** | Excused performance for unforeseeable events | Too narrow or too broad definition |4647### Contract Review Steps48491. **Identify the parties**: Who is agreeing? Are entity names correct?502. **Understand the deal**: What is each side giving and receiving?513. **Check formation elements**: Offer, acceptance, consideration, legality — all present?524. **Review essential clauses**: Use the table above as a checklist535. **Flag risk areas**: Unlimited liability, one-sided terms, vague scope, auto-renewal546. **Check governing law**: Which jurisdiction's law applies? Is the dispute resolution mechanism acceptable?5556## Output Format5758```markdown59# Contract Review: {Agreement Type}6061## Parties62- Party A: {name, role}63- Party B: {name, role}6465## Deal Summary66{What is being exchanged — in plain language}6768## Clause Review69| Clause | Present? | Assessment | Risk Level |70|--------|---------|-----------|-----------|71| Scope | Y/N | {notes} | 🟢/🟡/🔴 |72| Payment | Y/N | ... | ... |73| Termination | Y/N | ... | ... |74| Liability | Y/N | ... | ... |75| IP | Y/N | ... | ... |76| Non-compete | Y/N | ... | ... |7778## Red Flags791. {specific concern with clause reference}8081## Recommendations821. {suggested modification}83```8485## Examples8687### Correct Application88**Scenario:** SaaS service agreement review89- **Red flag**: "Vendor may modify pricing with 30 days' notice" → One-sided price change clause. Should be: pricing locked for contract term, changes only at renewal.90- **Red flag**: "Client indemnifies Vendor against all claims" → One-sided indemnification. Should be mutual.91- **Missing**: No SLA (service level agreement) defined → No recourse if service goes down. Recommend adding uptime commitment with credits ✓9293### Incorrect Application94- "This contract looks fine because both parties signed it" → Signature doesn't make every clause fair or enforceable. Must review individual clause terms. A signed contract with an unconscionable clause may still be challenged.9596## Gotchas9798- **"Standard contract" doesn't mean fair**: Vendor-drafted "standard" contracts are drafted in the vendor's favor. Everything is negotiable.99- **Taiwan-specific**: Taiwan's Civil Code governs contracts. Key differences from common law: no consideration requirement (promise for promise is sufficient), mandatory provisions in certain contract types (labor, consumer).100- **Auto-renewal traps**: Many contracts auto-renew unless notice is given 30-90 days before expiry. Calendar the notice deadline.101- **This skill is NOT legal advice**: It provides educational analysis of contract concepts. Always consult a licensed attorney for binding legal decisions.102103## References104105- For Taiwan-specific contract law (Civil Code), see `references/taiwan-contract-law.md`106- For common contract templates, see `references/contract-templates.md`
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