--- name: review-contract description: Review a contract against your organization's negotiation playbook — flag deviations, generate redlines, provide business impact analysis. Use when reviewing vendor or customer agreements, when you need clause-by-clause analysis against standard positions, or when preparing a negotiation strategy with prioritized redlines and fallback positions. argument-hint: "" --- # /review-contract -- Contract Review Against Playbook > If you see unfamiliar placeholders or need to check which tools are connected, see [CONNECTORS.md](../../CONNECTORS.md). Review a contract against your organization's negotiation playbook. Analyze each clause, flag deviations, generate redline suggestions, and provide business impact analysis. **Important**: You assist with legal workflows but do not provide legal advice. All analysis should be reviewed by qualified legal professionals before being relied upon. ## Invocation ``` /review-contract ``` Review the contract: @$1 ## Workflow ### Step 1: Accept the Contract Accept the contract in any of these formats: - **File upload**: PDF, DOCX, or other document format - **URL**: Link to a contract in your CLM, cloud storage (e.g., Box, Egnyte, SharePoint), or other document system - **Pasted text**: Contract text pasted directly into the conversation If no contract is provided, prompt the user to supply one. ### Step 2: Gather Context Ask the user for context before beginning the review: 1. **Which side are you on?** (vendor/supplier, customer/buyer, licensor, licensee, partner -- or other) 2. **Deadline**: When does this need to be finalized? (Affects prioritization of issues) 3. **Focus areas**: Any specific concerns? (e.g., "data protection is critical", "we need flexibility on term", "IP ownership is the key issue") 4. **Deal context**: Any relevant business context? (e.g., deal size, strategic importance, existing relationship) If the user provides partial context, proceed with what you have and note assumptions. ### Step 3: Load the Playbook Look for the organization's contract review playbook in local settings (e.g., `legal.local.md` or similar configuration files). The playbook should define: - **Standard positions**: The organization's preferred terms for each major clause type - **Acceptable ranges**: Terms that can be agreed to without escalation - **Escalation triggers**: Terms that require senior counsel review or outside counsel involvement **If no playbook is configured:** - Inform the user that no playbook was found - Offer two options: 1. Help the user set up their playbook (walk through defining positions for key clauses) 2. Proceed with a generic review using widely-accepted commercial standards as the baseline - If proceeding generically, clearly note that the review is based on general commercial standards, not the organization's specific positions ### Step 4: Clause-by-Clause Analysis Apply the following review process: 1. **Identify the contract type**: SaaS agreement, professional services, license, partnership, procurement, etc. The contract type affects which clauses are most material. 2. **Determine the user's side**: Vendor, customer, licensor, licensee, partner. This fundamentally changes the analysis (e.g., limitation of liability protections favor different parties). 3. **Read the entire contract** before flagging issues. Clauses interact with each other (e.g., an uncapped indemnity may be partially mitigated by a broad limitation of liability). 4. **Analyze each material clause** against the playbook position. 5. **Consider the contract holistically**: Are the overall risk allocation and commercial terms balanced? Analyze the contract systematically, covering at minimum: | Clause Category | Key Review Points | |----------------|-------------------| | **Limitation of Liability** | Cap amount, carveouts, mutual vs. unilateral, consequential damages | | **Indemnification** | Scope, mutual vs. unilateral, cap, IP infringement, data breach | | **IP Ownership** | Pre-existing IP, developed IP, work-for-hire, license grants, assignment | | **Data Protection** | DPA requirement, processing terms, sub-processors, breach notification, cross-border transfers | | **Confidentiality** | Scope, term, carveouts, return/destruction obligations | | **Representations & Warranties** | Scope, disclaimers, survival period | | **Term & Termination** | Duration, renewal, termination for convenience, termination for cause, wind-down | | **Governing Law & Dispute Resolution** | Jurisdiction, venue, arbitration vs. litigation | | **Insurance** | Coverage requirements, minimums, evidence of coverage | | **Assignment** | Consent requirements, change of control, exceptions | | **Force Majeure** | Scope, notification, termination rights | | **Payment Terms** | Net terms, late fees, taxes, price escalation | For each clause, assess against the playbook (or generic standards) and note whether it is present, absent, or unusual. #### Detailed Clause Guidance ##### Limitation of Liability **Key elements to review:** - Cap amount (fixed dollar amount, multiple of fees, or uncapped) - Whether the cap is mutual or applies differently to each party - Carveouts from the cap (what liabilities are uncapped) - Whether consequential, indirect, special, or punitive damages are excluded - Whether the exclusion is mutual - Carveouts from the consequential damages exclusion - Whether the cap applies per-claim, per-year, or aggregate **Common issues:** - Cap set at a fraction of fees paid (e.g., "fees paid in the prior 3 months" on a low-value contract) - Asymmetric carveouts favoring the drafter - Broad carveouts that effectively eliminate the cap (e.g., "any breach of Section X" where Section X covers most obligations) - No consequential damages exclusion for one party's breaches ##### Indemnification **Key elements to review:** - Whether indemnification is mutual or unilateral - Scope: what triggers the indemnification obligation (IP infringement, data breach, bodily injury, breach of reps and warranties) - Whether indemnification is capped (often subject to the overall liability cap, or sometimes uncapped) - Procedure: notice requirements, right to control defense, right to settle - Whether the indemnitee must mitigate - Relationship between indemnification and the limitation of liability clause **Common issues:** - Unilateral indemnification for IP infringement when both parties contribute IP - Indemnification for "any breach" (too broad; essentially converts the liability cap to uncapped liability) - No right to control defense of claims - Indemnification obligations that survive termination indefinitely ##### Intellectual Property **Key elements to review:** - Ownership of pre-existing IP (each party should retain their own) - Ownership of IP developed during the engagement - Work-for-hire provisions and their scope - License grants: scope, exclusivity, territory, sublicensing rights - Open source considerations - Feedback clauses (grants on suggestions or improvements) **Common issues:** - Broad IP assignment that could capture the customer's pre-existing IP - Work-for-hire provisions extending beyond the deliverables - Unrestricted feedback clauses granting perpetual, irrevocable licenses - License scope broader than needed for the business relationship ##### Data Protection **Key elements to review:** - Whether a Data Processing Agreement/Addendum (DPA) is required - Data controller vs. data processor classification - Sub-processor rights and notification obligations - Data breach notification timeline (72 hours for GDPR) - Cross-border data transfer mechanisms (SCCs, adequacy decisions, binding corporate rules) - Data deletion or return obligations on termination - Data security requirements and audit rights - Purpose limitation for data processing **Common issues:** - No DPA when personal data is being processed - Blanket authorization for sub-processors without notification - Breach notification timeline longer than regulatory requirements - No cross-border transfer protections when data moves internationally - Inadequate data deletion provisions ##### Term and Termination **Key elements to review:** - Initial term and renewal terms - Auto-renewal provisions and notice periods - Termination for convenience: available? notice period? early termination fees? - Termination for cause: cure period? what constitutes cause? - Effects of termination: data return, transition assistance, survival clauses - Wind-down period and obligations **Common issues:** - Long initial terms with no termination for convenience - Auto-renewal with short notice windows (e.g., 30-day notice for annual renewal) - No cure period for termination for cause - Inadequate transition assistance provisions - Survival clauses that effectively extend the agreement indefinitely ##### Governing Law and Dispute Resolution **Key elements to review:** - Choice of law (governing jurisdiction) - Dispute resolution mechanism (litigation, arbitration, mediation first) - Venue and jurisdiction for litigation - Arbitration rules and seat (if arbitration) - Jury waiver - Class action waiver - Prevailing party attorney's fees **Common issues:** - Unfavorable jurisdiction (unusual or remote venue) - Mandatory arbitration with rules favorable to the drafter - Waiver of jury trial without corresponding protections - No escalation process before formal dispute resolution ### Step 5: Flag Deviations Classify each deviation from the playbook using a three-tier system: #### GREEN -- Acceptable The clause aligns with or is better than the organization's standard position. Minor variations that are commercially reasonable and do not increase risk materially. **Examples:** - Liability cap at 18 months of fees when standard is 12 months (better for the customer) - Mutual NDA term of 2 years when standard is 3 years (shorter but reasonable) - Governing law in a well-established commercial jurisdiction close to the preferred one **Action**: Note for awareness. No negotiation needed. #### YELLOW -- Negotiate The clause falls outside the standard position but within a negotiable range. The term is common in the market but not the organization's preference. Requires attention and likely negotiation, but not escalation. **Examples:** - Liability cap at 6 months of fees when standard is 12 months (below standard but negotiable) - Unilateral indemnification for IP infringement when standard is mutual (common market position but not preferred) - Auto-renewal with 60-day notice when standard is 90 days - Governing law in an acceptable but not preferred jurisdiction **Action**: Generate specific redline language. Provide fallback position. Estimate business impact of accepting vs. negotiating. - **Include**: Specific redline language to bring the term back to standard position - **Include**: Fallback position if the counterparty pushes back - **Include**: Business impact of accepting as-is vs. negotiating #### RED -- Escalate The clause falls outside acceptable range, triggers a defined escalation criterion, or poses material risk. Requires senior counsel review, outside counsel involvement, or business decision-maker sign-off. **Examples:** - Uncapped liability or no limitation of liability clause - Unilateral broad indemnification with no cap - IP assignment of pre-existing IP - No DPA offered when personal data is processed - Unreasonable non-compete or exclusivity provisions - Governing law in a problematic jurisdiction with mandatory arbitration **Action**: Explain the specific risk. Provide market-standard alternative language. Estimate exposure. Recommend escalation path. - **Include**: Why this is a RED flag (specific risk) - **Include**: What the standard market position looks like - **Include**: Business impact and potential exposure - **Include**: Recommended escalation path ### Step 6: Generate Redline Suggestions For each YELLOW and RED deviation, provide: - **Current language**: Quote the relevant contract text - **Suggested redline**: Specific alternative language - **Rationale**: Brief explanation suitable for sharing with the counterparty - **Priority**: Whether this is a must-have or nice-to-have in negotiation #### Redline Generation Best Practices When generating redline suggestions: 1. **Be specific**: Provide exact language, not vague guidance. The redline should be ready to insert. 2. **Be balanced**: Propose language that is firm on critical points but commercially reasonable. Overly aggressive redlines slow negotiations. 3. **Explain the rationale**: Include a brief, professional rationale suitable for sharing with the counterparty's counsel. 4. **Provide fallback positions**: For YELLOW items, include a fallback position if the primary ask is rejected. 5. **Prioritize**: Not all redlines are equal. Indicate which are must-haves and which are nice-to-haves. 6. **Consider the relationship**: Adjust tone and approach based on whether this is a new vendor, strategic partner, or commodity supplier. #### Redline Format For each redline: ``` **Clause**: [Section reference and clause name] **Current language**: "[exact quote from the contract]" **Proposed redline**: "[specific alternative language with additions in bold and deletions struck through conceptually]" **Rationale**: [1-2 sentences explaining why, suitable for external sharing] **Priority**: [Must-have / Should-have / Nice-to-have] **Fallback**: [Alternative position if primary redline is rejected] ``` ### Step 7: Business Impact Summary Provide a summary section covering: - **Overall risk assessment**: High-level view of the contract's risk profile - **Top 3 issues**: The most important items to address - **Negotiation strategy**: Recommended approach (which issues to lead with, what to concede) - **Timeline considerations**: Any urgency factors affecting the negotiation approach #### Negotiation Priority Framework When presenting redlines, organize by negotiation priority: **Tier 1 -- Must-Haves (Deal Breakers)** Issues where the organization cannot proceed without resolution: - Uncapped or materially insufficient liability protections - Missing data protection requirements for regulated data - IP provisions that could jeopardize core assets - Terms that conflict with regulatory obligations **Tier 2 -- Should-Haves (Strong Preferences)** Issues that materially affect risk but have negotiation room: - Liability cap adjustments within range - Indemnification scope and mutuality - Termination flexibility - Audit and compliance rights **Tier 3 -- Nice-to-Haves (Concession Candidates)** Issues that improve the position but can be conceded strategically: - Preferred governing law (if alternative is acceptable) - Notice period preferences - Minor definitional improvements - Insurance certificate requirements **Negotiation strategy**: Lead with Tier 1 items. Trade Tier 3 concessions to secure Tier 2 wins. Never concede on Tier 1 without escalation. ### Step 8: CLM Routing (If Connected) If a Contract Lifecycle Management system is connected via MCP: - Recommend the appropriate approval workflow based on contract type and risk level - Suggest the correct routing path (e.g., standard approval, senior counsel, outside counsel) - Note any required approvals based on contract value or risk flags If no CLM is connected, skip this step. ## Output Format Structure the output as: ``` ## Contract Review Summary **Document**: [contract name/identifier] **Parties**: [party names and roles] **Your Side**: [vendor/customer/etc.] **Deadline**: [if provided] **Review Basis**: [Playbook / Generic Standards] ## Key Findings [Top 3-5 issues with severity flags] ## Clause-by-Clause Analysis ### [Clause Category] -- [GREEN/YELLOW/RED] **Contract says**: [summary of the provision] **Playbook position**: [your standard] **Deviation**: [description of gap] **Business impact**: [what this means practically] **Redline suggestion**: [specific language, if YELLOW or RED] [Repeat for each major clause] ## Negotiation Strategy [Recommended approach, priorities, concession candidates] ## Next Steps [Specific actions to take] ``` ## Notes - If the contract is in a language other than English, note this and ask if the user wants a translation or review in the original language - For very long contracts (50+ pages), offer to focus on the most material sections first and then do a complete review - Always remind the user that this analysis should be reviewed by qualified legal counsel before being relied upon for legal decisions --- Attribution added by YourAIKit. 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