Contract Analyzer

Contract Analyzer

Intelligent contract review highlighting risks, key terms, and unusual provisions.

When to Use This Skill

Activate when the user:

• Provides a contract or agreement to review
• Asks "review this contract"
• Needs to understand contract terms
• Wants concerning clauses identified
• Mentions NDA, employment agreement, freelance contract
• Needs to compare contract terms
• Asks about legal document analysis

⚠️ Important Disclaimers

Include this disclaimer in every output:

⚠️ Legal Disclaimer: This is informational analysis only, not legal advice. Always consult with a qualified attorney for legal matters. Contract interpretation can be complex and jurisdiction-specific.

Instructions

1. Identify Contract Type

   • Employment agreement
   • Independent contractor/freelance agreement
   • Non-disclosure agreement (NDA)
   • Service agreement
   • Partnership agreement
   • Software license
   • Real estate agreement
   • Purchase agreement

2. Extract Key Terms

   Financial Terms:

   • Payment amount and schedule
   • Rate increases or bonuses
   • Expense reimbursement
   • Late payment penalties
   • Price adjustments

   Duration and Termination:

   • Contract length
   • Renewal terms (automatic or manual)
   • Termination conditions
   • Notice period required
   • Termination fees or penalties

   Intellectual Property:

   • Work-for-hire provisions
   • IP ownership (who owns what)
   • IP assignment clauses
   • License grants
   • Pre-existing IP protections

   Liability and Indemnification:

   • Liability caps
   • Indemnification obligations
   • Insurance requirements
   • Warranty disclaimers

   Other Critical Terms:

   • Non-compete clauses
   • Confidentiality obligations
   • Dispute resolution (arbitration, jurisdiction)
   • Governing law
   • Amendment procedures

3. Flag Concerning Clauses

   Red Flags (High Risk):

   • Unlimited liability
   • Perpetual non-compete
   • Automatic renewal without notice
   • Unreasonable indemnification
   • One-sided termination rights
   • Unclear payment terms
   • Overly broad IP assignment
   • Waiver of legal rights
   • Mandatory arbitration (in some contexts)

   Yellow Flags (Review Carefully):

   • Long non-compete duration
   • Broad confidentiality scope
   • Short termination notice
   • Net 60+ payment terms
   • Restrictive exclusivity clauses
   • Unilateral amendment rights

4. Compare to Industry Standards

   • Note terms that deviate from typical agreements
   • Identify unusually favorable or unfavorable terms
   • Flag missing standard protections
   • Note one-sided provisions

5. Assess Balance

   • Is contract heavily favoring one party?
   • Are obligations reciprocal?
   • Are penalties balanced?
   • Are protections mutual?

6. Provide Actionable Recommendations

   • Specific clauses to negotiate
   • Alternative language suggestions
   • Questions to ask the other party
   • Terms to add or clarify
   • Deal-breakers to consider

Output Format

# Contract Analysis Report

⚠️ **Legal Disclaimer**: This is informational analysis only, not legal advice. Always consult with a qualified attorney for legal matters.

## Contract Overview
- **Type**: [Contract type]
- **Parties**: [Your company] & [Other party]
- **Effective Date**: [Date]
- **Term**: [Duration]

---

## 🚨 Red Flags (Critical Issues)

### 1. Unlimited Personal Liability (Section X)
**Clause**: "[Quote problematic language]"

**Risk**: You could be personally liable for unlimited damages, even beyond insurance coverage.

**Standard Alternative**: Liability should be capped at contract value or insurance limits.

**Recommendation**: Negotiate liability cap of $X or insurance policy limit.

---

## ⚠️ Yellow Flags (Concerning Terms)

### 2. 2-Year Non-Compete (Section Y)
**Clause**: "[Quote]"

**Concern**: Prevents working in your field for 24 months.

**Industry Standard**: 6-12 months is more typical for this role.

**Recommendation**: Negotiate reduction to 6 months and narrower geographic/industry scope.

---

## 💰 Financial Terms

| Term | Details | Assessment |
|------|---------|------------|
| Payment | $X,XXX/month | ✓ Reasonable |
| Payment Schedule | Net 60 | ⚠️ Long (Net 30 preferred) |
| Late Fees | None | ⚠️ Consider adding |
| Rate Increases | Annual 3% | ✓ Good |

---

## 📋 Key Terms Summary

### Intellectual Property
- **Ownership**: [Who owns work product]
- **Assessment**: ⚠️ Clause X assigns all IP, including pre-existing work
- **Recommendation**: Add carve-out for pre-existing IP

### Termination
- **Notice Period**: 30 days
- **Termination for Convenience**: [Yes/No]
- **Assessment**: ✓ Reasonable terms

### Confidentiality
- **Duration**: 3 years post-termination
- **Scope**: [Broad/Narrow]
- **Assessment**: ✓ Standard

### Dispute Resolution
- **Method**: Mandatory arbitration (JAMS rules)
- **Jurisdiction**: [State]
- **Assessment**: ⚠️ Limits court access; may favor large company

---

## ⚖️ Balance Assessment

**Overall Balance**: ⚠️ Somewhat one-sided

**Favors**: [Party name]

**Issues**:
- Termination rights are one-sided (they can terminate for convenience, you cannot)
- Indemnification obligations only apply to you
- They can amend terms with 30 days notice

---

## ✅ Positive Terms

1. Clear payment schedule
2. Reasonable confidentiality duration
3. Insurance requirements are standard
4. IP ownership for pre-existing work protected

---

## 📝 Negotiation Recommendations

### Must Negotiate (Deal Critical)
1. **Liability Cap**: Add cap of $XXX,XXX or insurance limits
2. **Non-Compete**: Reduce to 6 months

### Should Negotiate (High Priority)
3. **Payment Terms**: Request Net 30 instead of Net 60
4. **Mutual Termination**: Add for-convenience termination rights for both parties

### Consider Negotiating (Nice to Have)
5. **Arbitration**: Add option for small claims court
6. **Amendment Rights**: Require mutual consent for material changes

---

## ❓ Questions to Ask

1. "Can we cap liability at the contract value of $X?"
2. "Would you consider reducing the non-compete period to 6 months?"
3. "Can we adjust payment terms to Net 30?"
4. "Is the mandatory arbitration clause negotiable?"

---

## 🚩 Missing Clauses

Standard provisions not included:
- Force majeure clause (pandemic, natural disasters)
- Data protection/GDPR compliance
- Insurance requirements
- Warranty of authority

---

## Overall Recommendation

**Risk Level**: ⚠️ Medium-High

**Action**: Do NOT sign as-is. Negotiate key terms (liability cap, non-compete, payment terms) before signing. Consult attorney for review.

**Deal Assessment**: [Acceptable if concerns addressed / Proceed with caution / Significant concerns]

Examples

User: "Review this freelance contract" Response: Identify contract type (independent contractor) → Extract payment terms, IP ownership, termination → Flag unlimited indemnification clause → Note missing late payment terms → Compare to standard freelance agreements → Recommend specific negotiations

User: "Is this NDA reasonable?" Response: Analyze confidentiality scope (overly broad, includes "residual knowledge") → Check duration (perpetual - concerning) → Review reciprocity (one-way NDA) → Flag concerning terms → Suggest mutual NDA with 3-year term

User: "What should I look out for in this employment agreement?" Response: Review compensation, benefits, IP assignment → Flag broad non-compete (entire industry, 2 years) → Note missing remote work provisions → Check termination clauses → Identify one-sided provisions → Provide negotiation priorities

Best Practices

• Always include legal disclaimer
• Quote specific problematic language
• Provide section/clause numbers
• Explain why something is concerning (not just that it is)
• Offer specific alternative language
• Prioritize issues (must-fix vs. nice-to-have)
• Compare to industry standards when possible
• Note missing standard protections
• Consider user's leverage and circumstances
• Provide negotiation talking points
• Be specific with recommendations
• Highlight positive terms too (not just negative)
• Use clear risk indicators (🚨 ⚠️ ✓)
• Make output scannable and actionable