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

Red Flags (Quick Scan)

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

Missing Provisions

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

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 Flag Why It Matters

Liability cap < 6 months Inadequate protection

Uncapped indemnification Unlimited exposure

"As-is" with no warranty No recourse for defects

Unilateral suspension without notice Service can vanish

Unilateral amendment rights Terms can change

No termination for convenience Locked in

Perpetual obligations (tails, non-competes) Indefinite exposure

Offshore jurisdiction (BVI, Cayman) Expensive to enforce

Pre-signed conflict waivers No recourse for conflicts

"Sole discretion" language favoring counterparty No objective standard

Class action waiver + mandatory arbitration Limited remedies

Asymmetric assignment rights They can assign, you can't

Document Type Checklists

NDA Checklist

Category Check For

Direction One-way or mutual?

Definition scope "All information" too broad? Standard exceptions?

Term 2 years short, 3-5 typical, indefinite for trade secrets

Permitted disclosure "Representatives" defined? Flow-down required?

Residuals clause Can use general knowledge retained in memory?

Non-solicitation Employees protected?

Standstill Prevents hostile acquisition actions?

No-contact Customers, suppliers, employees protected?

Return/destruction Certification required?

Public announcement Prohibits disclosure of discussions?

Compelled disclosure Notice required? Time to seek protective order?

Injunctive relief Pre-agreed specific performance? Bond waiver?

SaaS/MSA Checklist

Category Check For

Liability cap 12+ months = standard

Uptime SLA 99.9% with credits = standard

Suspension rights Unilateral? Notice required?

Data ownership Customer owns customer data?

Data export Format, duration, cost on termination?

Price increases Capped? Notice period?

Auto-renewal notice 90+ days = good, <60 = risk

Termination Mutual for convenience? Cure period for cause?

Subprocessors Notice of changes? Approval rights?

Insurance Vendor carries E&O, cyber?

Payment/Merchant Agreement Checklist

Category Check For

Reserve/holdback Amount, duration, release conditions?

Chargeback liability Capped? Fraud protection?

Network rules Incorporated by reference? Access provided?

Auto-debit authority Notice before debits?

Settlement timing When do you receive funds?

Volume commitments Realistic? Penalty for shortfall?

Suspension rights Immediate or notice?

Termination tail How long do obligations survive?

Audit rights Frequency, notice, cost allocation?

PCI compliance Who bears cost?

M&A Agreement Checklist

Category Check For

Purchase price Cash vs. stock vs. earnout mix?

Earnout mechanics Measurement, discretion, audit rights, acceleration?

Escrow/holdback Amount (10-15% typical), duration (12-18 mo), release?

Rep survival 12-24 months general, longer for fundamental

Indemnification cap 10-20% of purchase price typical

Basket type True deductible vs. tipping?

Sandbagging Pro-buyer or anti-sandbagging?

Non-compete 2-3 years, geographic scope?

Working capital Target, collar, true-up mechanism?

MAC definition Carve-outs for market conditions?

Employment comp Counted in purchase price or separate?

Finder/Broker Agreement Checklist

Category Check For

Fee percentage Specified or blank?

Fee calculation What's included in deal value? Employment comp?

"Covered buyer" definition How broad? Any prior relationship carve-out?

Tail period 12-24 months typical; perpetual = red flag

Exclusivity Exclusive or non-exclusive?

Minimum fee Floor amount?

Joint representation Consent required? Conflict waiver?

Escrow deduction Auto-pay from proceeds?

Term/termination Can you exit?

Broker status BD 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

Provision Standard Yellow Flag Red Flag

Liability cap 12 months' fees 6-11 months <6 months

Non-compete duration 1-2 years 3-4 years 5+ years

Non-compete geography Where business operates State-wide Nationwide

Auto-renewal notice 90+ days 60-89 days <60 days

Termination notice Mutual, 60-90 days One-sided, 30 days Immediate

Indemnification Mutual, capped Asymmetric Uncapped

Rep survival (M&A) 12-18 months general 24-30 months 36+ months

Escrow (M&A) 10-15% for 12-18 mo 15-20% for 18-24 mo

20% or >24 mo

Confidentiality (NDA) 3 years general 2 years 5+ years

Fee tail (broker) 12-18 months 24 months Perpetual

SLA uptime 99.9% with credits 99.5% No SLA

Data export 90 days, standard format 30 days None

Price increase cap CPI or 5% annual 10% annual Uncapped

Cure period 30 days 15 days None

Negotiability Guide

Rating Meaning Examples

High Usually accepted Mutual termination, cure periods, data export

Medium Depends on leverage Liability cap increase, price caps

Low Rarely changed Network rules (payments), regulatory requirements

None Non-negotiable Card 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)