Contract Analyzer

Intelligent contract review highlighting risks, key terms, and unusual provisions.

When to Use This Skill

Activate when the user:

Provides a contract or agreement to review
Asks "review this contract"
Needs to understand contract terms
Wants concerning clauses identified
Mentions NDA, employment agreement, freelance contract
Needs to compare contract terms
Asks about legal document analysis

⚠️ Important Disclaimers

Include this disclaimer in every output:

⚠️ Legal Disclaimer: This is informational analysis only, not legal advice. Always consult with a qualified attorney for legal matters. Contract interpretation can be complex and jurisdiction-specific.

Instructions

Identify Contract Type
- Employment agreement
- Independent contractor/freelance agreement
- Non-disclosure agreement (NDA)
- Service agreement
- Partnership agreement
- Software license
- Real estate agreement
- Purchase agreement
Extract Key Terms

Financial Terms:
- Payment amount and schedule
- Rate increases or bonuses
- Expense reimbursement
- Late payment penalties
- Price adjustments
Duration and Termination:
- Contract length
- Renewal terms (automatic or manual)
- Termination conditions
- Notice period required
- Termination fees or penalties
Intellectual Property:
- Work-for-hire provisions
- IP ownership (who owns what)
- IP assignment clauses
- License grants
- Pre-existing IP protections
Liability and Indemnification:
- Liability caps
- Indemnification obligations
- Insurance requirements
- Warranty disclaimers
Other Critical Terms:
- Non-compete clauses
- Confidentiality obligations
- Dispute resolution (arbitration, jurisdiction)
- Governing law
- Amendment procedures
Flag Concerning Clauses

Red Flags (High Risk):
- Unlimited liability
- Perpetual non-compete
- Automatic renewal without notice
- Unreasonable indemnification
- One-sided termination rights
- Unclear payment terms
- Overly broad IP assignment
- Waiver of legal rights
- Mandatory arbitration (in some contexts)
Yellow Flags (Review Carefully):
- Long non-compete duration
- Broad confidentiality scope
- Short termination notice
- Net 60+ payment terms
- Restrictive exclusivity clauses
- Unilateral amendment rights
Compare to Industry Standards
- Note terms that deviate from typical agreements
- Identify unusually favorable or unfavorable terms
- Flag missing standard protections
- Note one-sided provisions
Assess Balance
- Is contract heavily favoring one party?
- Are obligations reciprocal?
- Are penalties balanced?
- Are protections mutual?
Provide Actionable Recommendations
- Specific clauses to negotiate
- Alternative language suggestions
- Questions to ask the other party
- Terms to add or clarify
- Deal-breakers to consider

Output Format

# Contract Analysis Report

⚠️ **Legal Disclaimer**: This is informational analysis only, not legal advice. Always consult with a qualified attorney for legal matters.

## Contract Overview
- **Type**: [Contract type]
- **Parties**: [Your company] & [Other party]
- **Effective Date**: [Date]
- **Term**: [Duration]

---

## 🚨 Red Flags (Critical Issues)

### 1. Unlimited Personal Liability (Section X)
**Clause**: "[Quote problematic language]"

**Risk**: You could be personally liable for unlimited damages, even beyond insurance coverage.

**Standard Alternative**: Liability should be capped at contract value or insurance limits.

**Recommendation**: Negotiate liability cap of $X or insurance policy limit.

---

## ⚠️ Yellow Flags (Concerning Terms)

### 2. 2-Year Non-Compete (Section Y)
**Clause**: "[Quote]"

**Concern**: Prevents working in your field for 24 months.

**Industry Standard**: 6-12 months is more typical for this role.

**Recommendation**: Negotiate reduction to 6 months and narrower geographic/industry scope.

---

## 💰 Financial Terms

| Term | Details | Assessment |
|------|---------|------------|
| Payment | $X,XXX/month | ✓ Reasonable |
| Payment Schedule | Net 60 | ⚠️ Long (Net 30 preferred) |
| Late Fees | None | ⚠️ Consider adding |
| Rate Increases | Annual 3% | ✓ Good |

---

## 📋 Key Terms Summary

### Intellectual Property
- **Ownership**: [Who owns work product]
- **Assessment**: ⚠️ Clause X assigns all IP, including pre-existing work
- **Recommendation**: Add carve-out for pre-existing IP

### Termination
- **Notice Period**: 30 days
- **Termination for Convenience**: [Yes/No]
- **Assessment**: ✓ Reasonable terms

### Confidentiality
- **Duration**: 3 years post-termination
- **Scope**: [Broad/Narrow]
- **Assessment**: ✓ Standard

### Dispute Resolution
- **Method**: Mandatory arbitration (JAMS rules)
- **Jurisdiction**: [State]
- **Assessment**: ⚠️ Limits court access; may favor large company

---

## ⚖️ Balance Assessment

**Overall Balance**: ⚠️ Somewhat one-sided

**Favors**: [Party name]

**Issues**:
- Termination rights are one-sided (they can terminate for convenience, you cannot)
- Indemnification obligations only apply to you
- They can amend terms with 30 days notice

---

## ✅ Positive Terms

1. Clear payment schedule
2. Reasonable confidentiality duration
3. Insurance requirements are standard
4. IP ownership for pre-existing work protected

---

## 📝 Negotiation Recommendations

### Must Negotiate (Deal Critical)
1. **Liability Cap**: Add cap of $XXX,XXX or insurance limits
2. **Non-Compete**: Reduce to 6 months

### Should Negotiate (High Priority)
3. **Payment Terms**: Request Net 30 instead of Net 60
4. **Mutual Termination**: Add for-convenience termination rights for both parties

### Consider Negotiating (Nice to Have)
5. **Arbitration**: Add option for small claims court
6. **Amendment Rights**: Require mutual consent for material changes

---

## ❓ Questions to Ask

1. "Can we cap liability at the contract value of $X?"
2. "Would you consider reducing the non-compete period to 6 months?"
3. "Can we adjust payment terms to Net 30?"
4. "Is the mandatory arbitration clause negotiable?"

---

## 🚩 Missing Clauses

Standard provisions not included:
- Force majeure clause (pandemic, natural disasters)
- Data protection/GDPR compliance
- Insurance requirements
- Warranty of authority

---

## Overall Recommendation

**Risk Level**: ⚠️ Medium-High

**Action**: Do NOT sign as-is. Negotiate key terms (liability cap, non-compete, payment terms) before signing. Consult attorney for review.

**Deal Assessment**: [Acceptable if concerns addressed / Proceed with caution / Significant concerns]

Examples

User: "Review this freelance contract" Response: Identify contract type (independent contractor) → Extract payment terms, IP ownership, termination → Flag unlimited indemnification clause → Note missing late payment terms → Compare to standard freelance agreements → Recommend specific negotiations

User: "Is this NDA reasonable?" Response: Analyze confidentiality scope (overly broad, includes "residual knowledge") → Check duration (perpetual - concerning) → Review reciprocity (one-way NDA) → Flag concerning terms → Suggest mutual NDA with 3-year term

User: "What should I look out for in this employment agreement?" Response: Review compensation, benefits, IP assignment → Flag broad non-compete (entire industry, 2 years) → Note missing remote work provisions → Check termination clauses → Identify one-sided provisions → Provide negotiation priorities

Best Practices

Always include legal disclaimer
Quote specific problematic language
Provide section/clause numbers
Explain why something is concerning (not just that it is)
Offer specific alternative language
Prioritize issues (must-fix vs. nice-to-have)
Compare to industry standards when possible
Note missing standard protections
Consider user's leverage and circumstances
Provide negotiation talking points
Be specific with recommendations
Highlight positive terms too (not just negative)
Use clear risk indicators (🚨 ⚠️ ✓)
Make output scannable and actionable