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