contract-analyzer

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

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.

1. Identify Contract Type

- Employment agreement

- Independent contractor/freelance agreement

- Non-disclosure agreement (NDA)

- Service agreement

- Partnership agreement

- Software license

- Real estate agreement

- Purchase agreement

1. 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

1. 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

1. 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

1. Assess Balance

- Is contract heavily favoring one party?

- Are obligations reciprocal?

- Are penalties balanced?

- Are protections mutual?

1. 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

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# Contract Analysis Report

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

• Type: [Contract type]
• Parties: [Your company] & [Other party]
• Effective Date: [Date]
• Term: [Duration]

---

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.

---

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.

---

| 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 |

---

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

---

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

---

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

---

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)

1. Payment Terms: Request Net 30 instead of Net 60
2. Mutual Termination: Add for-convenience termination rights for both parties

Consider Negotiating (Nice to Have)

1. Arbitration: Add option for small claims court
2. Amendment Rights: Require mutual consent for material changes

---

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?"

---

Standard provisions not included:

• Force majeure clause (pandemic, natural disasters)
• Data protection/GDPR compliance
• Insurance requirements
• Warranty of authority

---

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]

```

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

• 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