Contract Risk Review

Purpose

Surface business and contractual risk quickly so a human reviewer can negotiate or escalate intelligently.

When to use

• A contract needs first-pass risk review before legal or procurement sign-off.
• A business owner wants obligations, liabilities, and red flags summarized.
• A negotiation needs fallback positions and open questions.

When not to use

• The user needs formal legal advice for a specific jurisdiction.
• The task is drafting litigation arguments or dispute strategy.

Inputs

• contract text or key clauses
• deal context, commercial goals, and fallback positions
• known red lines, approval thresholds, and data or security concerns

Procedure

1. Classify the agreement type and commercial stakes.
2. Review key clause families: scope, fees, term, liability, IP, confidentiality, data, termination, and dispute language.
3. Extract obligations, asymmetries, unusual exposure, and missing protections.
4. Rate issues by business impact and negotiation urgency.
5. Suggest fallback language or negotiation positions without pretending to replace counsel.
6. Call out where legal review is mandatory.

Output

• executive contract summary
• clause-by-clause risk table
• top red flags and why they matter
• fallback positions or negotiation notes
• unresolved questions for counsel or stakeholders

Definition of done

• A business owner can see the highest-risk clauses quickly.
• Missing protections and unclear obligations are explicit.
• The output states where human legal review is still required.

Examples

• "Review this vendor MSA and flag the clauses we should negotiate before signing."
• "Summarize our obligations and main risks in this customer SOW."

Quality Criteria

• Every finding is tied to a specific evidence source (log, test, metric)
• Pass/fail criteria are binary and measurable — no subjective judgments
• Severity levels are assigned with clear thresholds
• Remediation steps are provided for all critical and high findings

Verification (4C)

Check	Question
Correctness	Are all pass/fail criteria applied against the correct standard or rule?
Completeness	Were all required dimensions or checklist items evaluated?
Context-fit	Does the verification scope match the actual risk level of the deliverable?
Consequence	If this passed verification but had a hidden flaw, what is the worst-case impact?

Edge Cases

• Incomplete data for full assessment — Document which checks were limited and flag for re-verification when data becomes available.
• Ambiguous pass/fail criteria — Request clarification from the standard owner before scoring. Mark as 'Needs Review'.
• Multiple overlapping standards — Identify the governing standard and note where others diverge.

Changelog

• v1.0.0 — Initial release