contract-review

$2b

Read the full document before analyzing. Dangerous clauses are frequently in exhibits and schedules at the back.

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Identify contract type and parties — Determine agreement type (NDA, MSA, SOW, SaaS subscription, consulting, subcontractor, vendor) and which party is the user's company vs. the counterparty. Note if it looks like a counterparty template — these are typically one-sided and the counterparty expects pushback.

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Analyze across 8 risk categories — Work through the contract from the ops/finance perspective of a small business owner without in-house legal. Categories are ordered by typical risk severity; use judgment for context.

Category 1: Payment terms and cash flow

• Payment timing: Net-30 is standard; Net-60+ is flaggable; Net-90/120 is a hard negotiation point

• Payment triggers: acceptance periods that let the client slow-walk approvals indefinitely

• Late payment penalties: absence is a gap worth noting

• Invoicing requirements: rigid formats or PO numbers that can delay payment on technicalities

• Expense reimbursement: pre-approval requirements and caps

• Rate adjustments: annual increase mechanism for multi-year engagements

Category 2: Liability and indemnification

• Liability caps: uncapped liability is always a red flag

• Mutual vs. one-sided indemnification

• Indemnification scope: "any and all claims arising from the services" is not standard

• Insurance requirements: E&O, cyber, general liability — achievability at the required limits

• Consequential damages waiver: missing = flag prominently

Category 3: Termination and exit

• Termination for convenience: is it mutual? 30-day notice is typical

• Termination for cause: cure period; vague "material breach" without definition

• Wind-down: payment for in-progress work at termination

• Transition assistance: paid vs. unpaid, time-limited vs. open-ended

• Survival clauses: indefinite indemnification survival = flag

Category 4: Intellectual property

• IP assignment vs. license

• Pre-existing IP and background tools carve-out — absence means inadvertent assignment

• Work product definition breadth: drafts, notes, internal tools

Category 5: Scope and change management

• Scope definition clarity

• Change order process: absence = scope creep without compensation

• Acceptance criteria: subjective ("to client's satisfaction") vs. defined

• Timeline asymmetry: user penalized for delays but client is not for slow feedback

Category 6: Non-compete and exclusivity

• Non-compete scope, definition of "competitor," duration

• Exclusivity requirements on the user's company

• Non-solicitation: employee poaching is normal; industry-broad restrictions are not

Category 7: Confidentiality and data

• Confidentiality scope: "all information shared" with no exceptions is overly broad

• Duration: 2–3 years is typical; perpetual is aggressive

• Data handling security requirements vs. company size and data sensitivity

• Return/destruction requirements post-termination

Category 8: Operational concerns

• Governing law and dispute resolution; mandatory arbitration

• Auto-renewal: opt-out window and notice period (missing a 60-day window is a common SMB mistake)

• Assignment rights, especially if the client gets acquired

• Most favored nation: constrains pricing across the entire client book

• Audit rights: scope and frequency

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Present flagged summary — Organize by severity:

🔴 Red flags (push back before signing) — For each: quote the exact clause, explain the problem in plain language, suggest specific alternative language.

🟡 Yellow flags (negotiate, not deal-breakers) — For each: quote the clause, explain the concern, describe what "better" looks like.

🟢 Key terms to note (awareness only) — Payment schedules, notice periods, renewal dates, insurance requirements, key contacts.

📋 Contract summary — Plain-language summary: who does what, for how much, over what timeframe, under what conditions.

💡 Negotiation playbook — For each red and yellow flag: what to ask for, how to frame the ask, and what a reasonable compromise looks like.

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Export redline DOCX — After presenting the summary, offer to export a redlined DOCX with the suggested changes marked up. Use the docx skill to generate a Word document that:

• Preserves the original contract structure

• Marks suggested deletions in strikethrough and additions in underline

• Adds a cover page summarizing the changes

Ask: "Want me to export a redlined DOCX you can send back to the counterparty?"

Approval gates

• Never characterize the output as legal advice. Always recommend attorney review for red flags or binding decisions.

• Quote actual clause language, not paraphrases. The user needs the exact text for negotiation calls.

• Flag what's missing, not just what's there. A contract silent on liability caps or change orders is often more dangerous than one with unfavorable terms.

• Do not flag standard boilerplate. If a clause is fair and market-standard, skip it. The user wants signal, not a clause-by-clause restatement.

• Compare to market norms when flagging: "Net-90 is uncommon in professional services — Net-30 is standard."

• Adjust recommendations to the power dynamic. A Fortune 500 procurement MSA is a different negotiation than a small startup agreement.

• Never send the redlined DOCX to the counterparty without explicit user confirmation.

Reference

• reference/gotchas.md — edge cases in contract analysis

• reference/docusign-fetch.md — pulling envelopes from DocuSign

• reference/gmail-fetch.md — finding contract attachments in Gmail

• reference/examples/flagged-summary-saas.md — worked example: SaaS agreement review output