Review Material Contract Review

Skill: Material Contract Review — Risk Assessment and Discrepancy Log

1. Subject-matter triage (only if applicable)

• Identify the universe of contracts in the data room, then reconcile that universe against the summary spreadsheet before analyzing substantive risk.
• Separate reviewed contracts into categories that warrant specialized treatment, including employment, real estate, joint venture/co-development, IP licensing, and ordinary commercial arrangements.
• Flag any contract listed in the spreadsheet but not available in the data room as a missing-document issue, not merely a clerical note.
• Determine whether the SPA’s material contract definition changes disclosure treatment, diligence priority, or the need to list the contract on a disclosure schedule.

2. Failure modes the skill is correcting

• The contract review repeats spreadsheet labels without confirming that the underlying contract text matches the summary description.
• Missing contracts are overlooked because the reviewer treats the spreadsheet as descriptive rather than as a diligence baseline.
• The SPA material contract definition is not used as the organizing rule for whether a contract is within scope for disclosure and risk analysis.
• The review identifies issues but does not tie them to deal consequences, making the memo difficult to use in acquisition decision-making.
• Specialized agreements are treated as generic commercial contracts, causing key provisions in employment, lease, JV, and IP arrangements to be missed.
• The discrepancy log records differences without ranking them by transaction significance or operational impact.
• The output becomes a narrative summary instead of a contract-by-contract diligence product that the deal team can action.

3. Legal frameworks / domain conventions that apply

• SPA material contract analysis: use the transaction documents’ definition to classify each agreement and determine disclosure implications.
• Contract-by-contract diligence convention: assess each agreement on its own terms, then compare it to the spreadsheet summary and the draft SPA framework.
• Change-of-control and anti-assignment principles: identify consent, termination, or default triggers that may be activated by the acquisition.
• Core commercial risk review: term, renewal, termination, exclusivity, minimum commitments, volume obligations, indemnities, liability caps, governing law, and dispute resolution.
• Employment agreement review: change-of-control severance, restrictive covenants, IP assignment, confidentiality, and post-employment obligations.
• Lease review: assignment, change-of-control consent, landlord approval, renewal options, purchase rights, and early termination exposure.
• JV/co-development review: governance, reserved matters, exit rights, buy-out mechanics, dissolution triggers, and IP ownership/use rights.
• IP license review: scope of licensed rights, field-of-use restrictions, sublicense rights, ownership of improvements, and change-of-control effects.
• Disclosure practice: a discrepancy matters if it changes the legal characterization of the contract, the disclosure obligation, or the buyer’s post-closing operating flexibility.

4. Analytical scaffolds

• Start with the universe: list the contracts in the spreadsheet, identify which are present in the data room, and identify which are missing or mislabeled.
• For each available contract, compare the spreadsheet summary to the operative text and classify the match as consistent, incomplete, overstated, understated, or contradictory.
• For each contract, ask first whether it is within the SPA material contract definition; then assess whether any provision creates buyer-side closing, consent, disclosure, or operating risk.
• Use a standardized issue pass for every contract: identify the provision, explain why it matters in the acquisition context, and state whether it changes disclosure, consents, or integration planning.
• Apply specialized analysis where the contract type demands it; do not force a single commercial checklist onto all agreements.
• When multiple contracts of the same type appear, evaluate each one individually rather than collapsing them into a representative sample.
• For each issue, connect the provision to the relevant contract summary, the SPA disclosure treatment, and the practical consequence for closing or post-closing operations.
• Prioritize the discrepancy log by transaction significance, not by drafting neatness, and make the highest-impact mismatches immediately visible.
• End each advisory note with a concrete next step tied to the deal process, not a general observation.

5. Vertical / structural / temporal relationships (only if applicable)

• Track how contract rights change at signing, closing, post-closing integration, renewal dates, and termination events.
• Distinguish pre-closing consent requirements from post-closing operational restrictions.
• Treat parent-level or affiliate-level obligations as relevant when they can bind the acquired business after closing.
• Where a contract interacts with another source document, note the interaction explicitly rather than evaluating the contract in isolation.
• If the spreadsheet says one thing and the contract says another, identify which statement is more favorable to the buyer and why the difference matters for closing or disclosure.

6. Output structure conventions

• Produce three work products: a contract checklist, a risk assessment memorandum, and a discrepancy log.
• In the checklist, include for each contract: name or identifier, contract type, SPA material-contract status, core risks, and any missing-document or mismatch flags.
• In the memorandum, organize issues by contract or contract category, and for each issue state the contract, the provision at issue, the buyer-side risk, the disclosure or consent implication, and the recommended transaction response.
• In the discrepancy log, record each variance between the spreadsheet and the underlying contract text, including the spreadsheet description, the actual contract term, and the significance of the mismatch.
• Use an explicit severity scale once and apply it consistently across all issue entries; define the scale in the deliverable itself.
• For each issue entry, include enough detail to show why it matters in the acquisition context, but do not pad with unnecessary recitation of the contract.
• If a contract is unavailable, mark it clearly as missing and explain the diligence consequence.
• End the memo with a concise Recommended Actions section that assigns the next step to the relevant deal role and ties it to the transaction timeline.