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contract-review

Review legal contracts, NDAs, employment agreements, SaaS terms, and M&A documents. Identifies unfavorable terms, suggests redlines, and compares to market standards. Use for contract analysis, due diligence, or negotiation prep.

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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:

Red FlagWhy It Matters
Liability cap < 6 monthsInadequate protection
Uncapped indemnificationUnlimited exposure
"As-is" with no warrantyNo recourse for defects
Unilateral suspension without noticeService can vanish
Unilateral amendment rightsTerms can change
No termination for convenienceLocked in
Perpetual obligations (tails, non-competes)Indefinite exposure
Offshore jurisdiction (BVI, Cayman)Expensive to enforce
Pre-signed conflict waiversNo recourse for conflicts
"Sole discretion" language favoring counterpartyNo objective standard
Class action waiver + mandatory arbitrationLimited remedies
Asymmetric assignment rightsThey can assign, you can't

Document Type Checklists

NDA Checklist

CategoryCheck For
DirectionOne-way or mutual?
Definition scope"All information" too broad? Standard exceptions?
Term2 years short, 3-5 typical, indefinite for trade secrets
Permitted disclosure"Representatives" defined? Flow-down required?
Residuals clauseCan use general knowledge retained in memory?
Non-solicitationEmployees protected?
StandstillPrevents hostile acquisition actions?
No-contactCustomers, suppliers, employees protected?
Return/destructionCertification required?
Public announcementProhibits disclosure of discussions?
Compelled disclosureNotice required? Time to seek protective order?
Injunctive reliefPre-agreed specific performance? Bond waiver?

SaaS/MSA Checklist

CategoryCheck For
Liability cap12+ months = standard
Uptime SLA99.9% with credits = standard
Suspension rightsUnilateral? Notice required?
Data ownershipCustomer owns customer data?
Data exportFormat, duration, cost on termination?
Price increasesCapped? Notice period?
Auto-renewal notice90+ days = good, <60 = risk
TerminationMutual for convenience? Cure period for cause?
SubprocessorsNotice of changes? Approval rights?
InsuranceVendor carries E&O, cyber?

Payment/Merchant Agreement Checklist

CategoryCheck For
Reserve/holdbackAmount, duration, release conditions?
Chargeback liabilityCapped? Fraud protection?
Network rulesIncorporated by reference? Access provided?
Auto-debit authorityNotice before debits?
Settlement timingWhen do you receive funds?
Volume commitmentsRealistic? Penalty for shortfall?
Suspension rightsImmediate or notice?
Termination tailHow long do obligations survive?
Audit rightsFrequency, notice, cost allocation?
PCI complianceWho bears cost?

M&A Agreement Checklist

CategoryCheck For
Purchase priceCash vs. stock vs. earnout mix?
Earnout mechanicsMeasurement, discretion, audit rights, acceleration?
Escrow/holdbackAmount (10-15% typical), duration (12-18 mo), release?
Rep survival12-24 months general, longer for fundamental
Indemnification cap10-20% of purchase price typical
Basket typeTrue deductible vs. tipping?
SandbaggingPro-buyer or anti-sandbagging?
Non-compete2-3 years, geographic scope?
Working capitalTarget, collar, true-up mechanism?
MAC definitionCarve-outs for market conditions?
Employment compCounted in purchase price or separate?

Finder/Broker Agreement Checklist

CategoryCheck For
Fee percentageSpecified or blank?
Fee calculationWhat's included in deal value? Employment comp?
"Covered buyer" definitionHow broad? Any prior relationship carve-out?
Tail period12-24 months typical; perpetual = red flag
ExclusivityExclusive or non-exclusive?
Minimum feeFloor amount?
Joint representationConsent required? Conflict waiver?
Escrow deductionAuto-pay from proceeds?
Term/terminationCan you exit?
Broker statusBD registered if securities involved?

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

ProvisionStandardYellow FlagRed Flag
Liability cap12 months' fees6-11 months<6 months
Non-compete duration1-2 years3-4 years5+ years
Non-compete geographyWhere business operatesState-wideNationwide
Auto-renewal notice90+ days60-89 days<60 days
Termination noticeMutual, 60-90 daysOne-sided, 30 daysImmediate
IndemnificationMutual, cappedAsymmetricUncapped
Rep survival (M&A)12-18 months general24-30 months36+ months
Escrow (M&A)10-15% for 12-18 mo15-20% for 18-24 mo>20% or >24 mo
Confidentiality (NDA)3 years general2 years5+ years
Fee tail (broker)12-18 months24 monthsPerpetual
SLA uptime99.9% with credits99.5%No SLA
Data export90 days, standard format30 daysNone
Price increase capCPI or 5% annual10% annualUncapped
Cure period30 days15 daysNone

Negotiability Guide

RatingMeaningExamples
HighUsually acceptedMutual termination, cure periods, data export
MediumDepends on leverageLiability cap increase, price caps
LowRarely changedNetwork rules (payments), regulatory requirements
NoneNon-negotiableCard network mandates, banking regulations

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)

レビュー

まだレビューはありません。使ってみた感想をお寄せください。

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