leg/contracts/review

REVIEW

Contract review AI expert.

production Any — outputs JSON, Markdown, redline documents

improves: leg/contracts

Contract Review AI

Legal Disclaimer: This skill assists qualified legal professionals with research, drafting, and review workflows. It does not constitute legal advice and does not replace qualified legal counsel. All AI-generated risk scores, redline suggestions, and review reports must be reviewed and approved by a qualified legal professional before use in any commercial transaction.

This skill equips AI agents with the legal knowledge to perform first-pass contract review — identifying non-standard clauses, flagging missing protections, scoring risk per clause, and producing a structured review report. It reduces the time a qualified lawyer or contracts manager spends on initial review by handling the systematic comparison work, so human attention focuses on clauses that genuinely require professional judgment and negotiating strategy.

Configuration

# .env — optional configuration
LEG_JURISDICTION=ZA            # Default: ZA (South Africa). Options: ZA | UK | US
LEG_BASELINE_TEMPLATE=standard # Use 'standard' or path to custom baseline JSON
LEG_RISK_THRESHOLD=6           # Flag clauses at or above this risk score (1-10)

Supported Contract Types

NDA — mutual and one-way non-disclosure agreements
MSA / PSA — master services and professional services agreements
SLA — service level agreements with SLO and credit provisions
Employment — employment contracts (SA LRA compliant)
Vendor / Supplier — procurement and vendor agreements
Software / SaaS — software licence and subscription agreements

Core Capabilities

Clause-by-clause risk scoring — 1-10 scale with rationale for each score
Non-standard term identification — comparison against configurable baseline or market standard
Missing clause detection — what is absent matters as much as what is present
Liability exposure analysis — maximum exposure scenarios with triggering conditions
Payment terms summarisation — structured extraction of all payment obligations
Termination right mapping — all termination triggers, notice periods, and consequences
IP ownership clause extraction — work product, background IP, and licence grants
Comparative analysis — deviation report against stored standard templates
Executive summary generation — board-ready risk summary with key concerns
Redline suggestion generation — alternative clause language with commercial rationale

Review Output Structure

{
  "contract_review": {
    "document": "Master Services Agreement — Vendor XYZ",
    "review_date": "2026-03-31",
    "overall_risk_score": 7.2,
    "summary": "Above-market risk profile. Primary concerns: uncapped liability, missing IP ownership clause, unilateral termination right for vendor.",
    "clause_analysis": [
      {
        "clause": "Limitation of Liability",
        "location": "Section 8.2",
        "text_extracted": "Vendor's total liability shall not exceed the fees paid in the preceding 30 days...",
        "risk_score": 9,
        "issue": "30-day cap is extremely low for a 12-month contract — effectively limits recovery to 1/12th of annual fees",
        "market_standard": "12-month lookback is standard; some contracts use total contract value",
        "recommendation": "Negotiate to 12-month fee cap minimum, or total contract value for material breaches"
      },
      {
        "clause": "IP Ownership",
        "location": "Not found",
        "risk_score": 8,
        "issue": "No IP assignment clause — ownership of work product is ambiguous",
        "recommendation": "Add explicit clause: all work product created under this agreement vests in Client upon payment"
      }
    ],
    "missing_clauses": ["IP ownership", "Data processing agreement", "Business continuity"],
    "favourable_clauses": [
      "Confidentiality (Section 5) — standard 3-year term",
      "Governing law (South Africa — Western Cape) — acceptable"
    ]
  }
}

Redline Suggestion Format

## Original (Section 8.2):
Vendor's total liability shall not exceed the fees paid in the **preceding 30 days**.

## Suggested Redline:
Vendor's total liability shall not exceed the **greater of (i) the fees paid in the
preceding 12 months or (ii) ZAR 500,000** for any single claim or series of related claims.

## Rationale:
30-day cap creates insufficient protection for a 12-month engagement. 12-month lookback
is market standard for services contracts of this nature.

Pairing by Role

Role	Primary Use
Contracts Manager	AI reviews vendor MSA, scores each clause, flags deviations from standard terms, drafts redline suggestions for review
In-house Counsel	AI extracts liability exposure scenarios, calculates maximum risk, identifies triggering conditions for legal review
Procurement Lead	AI compares incoming vendor terms against standard playbook, produces deviation register for negotiation briefing
Legal Ops	AI processes contract pipeline, categorises by risk level, routes high-risk agreements for priority legal review

MCP Tools

Tool	Description
`leg_review_contract`	Run full first-pass review on a contract document, returning structured analysis with overall risk score
`leg_extract_clauses`	Extract and categorise all identifiable clauses from a contract document
`leg_score_risk`	Score a specific clause or clause text on the 1-10 risk scale with rationale
`leg_detect_missing`	Identify standard clauses that are absent from the contract given its type and jurisdiction
`leg_suggest_redline`	Generate alternative clause language for a flagged provision with commercial rationale
`leg_summarise_terms`	Produce an executive summary of key commercial terms: payment, liability, IP, termination
`leg_compare_baseline`	Compare contract against a stored standard template and produce a deviation register
`leg_analyse_liability`	Calculate maximum liability exposure scenarios with triggering conditions
`leg_generate_report`	Produce a formatted review report suitable for legal or board distribution

Clause Types Reference

Market standard positions for 15 standard clause types across SA, UK, and US commercial agreements:

Clause Type	Normal Position	Red Flags
Limitation of Liability	12-month fee cap; consequential loss excluded	No cap; sub-30-day lookback; consequential loss included
Indemnification	Mutual; IP & gross negligence only; capped	One-way; no cap; defence costs included
Termination for Convenience	Mutual; 90-day notice	Unilateral vendor; 7-day notice; fees accelerate
Termination for Cause	Mutual; 30-day cure period	No cure; immediate; broad triggers
IP Ownership	Client owns work product; vendor retains background IP	Clause absent; vendor owns all; ownership ambiguous
Confidentiality	Mutual; 3 years; standard exclusions	Perpetual; one-way; no exclusion for public domain
Payment Terms	30 days net; dispute mechanism	7-day terms; default interest above prime; no dispute mechanism
Warranties	Fitness for purpose; compliance with specs; no IP infringement	No warranties; total disclaimer; no remedy on breach
Governing Law	Agreed neutral jurisdiction; clearly specified	Absent; vendor's home jurisdiction only
Dispute Resolution	Negotiation then mediation then arbitration	Immediate litigation; foreign courts only; no cost sharing
Force Majeure	Defined events; notice; termination if >90 days	No definition; no notice; no termination right
Change of Control	Either party may terminate on change; notice required	Absent; automatic assignment permitted
Data Protection	POPIA/GDPR compliant; DPA attached; 72hr breach notification	No DPA; no breach notification; no data deletion obligation
Non-Solicitation	Mutual; 12 months; employees only	Unlimited duration; covers contractors and clients
Entire Agreement	Supersedes prior; amendments in writing only	Unilateral variation right; no notice of changes

Common Gotchas

Liability cap arithmetic — a 30-day cap on a 12-month contract limits recovery to 1/12th of annual fees. Always calculate the absolute ZAR/USD/GBP value implied by the cap formula, not just the formula itself.
Consequential loss carve-outs — many contracts disclaim consequential loss in general terms but then include specific indemnities (e.g. for IP infringement) with no cap. The specific indemnity overrides the general disclaimer. Check both.
Missing clauses are risk too — an absent IP ownership clause is often more dangerous than a bad one. The default legal position (IP stays with the creator) is rarely what the client intends.
Governing law vs jurisdiction — a contract can specify South African law but require disputes be heard in London courts. These are separate clauses; both must be checked.
Force majeure scope creep — overly broad definitions (e.g. "any event beyond the vendor's control") can excuse performance for foreseeable operational failures like staffing shortages.
Data processing agreements — POPIA (South Africa) and GDPR (UK/EU) both require a formal DPA when personal data is processed. Absence is a regulatory risk independent of the commercial terms.
Non-compete vs non-solicitation — non-compete clauses in employment contracts are rarely enforceable in South Africa; non-solicitation clauses generally are. Flag scope and duration of both.