Legal Contract Review Skill

When to Activate

Trigger when the user asks to:

• Review an NDA, MSA, DPA, SOW, or SaaS contract
• Analyze IP, liability, or termination clauses
• Check for GDPR, SOC2, or CCPA compliance language
• Draft a redline with recommended changes
• Compare contract terms to a standard baseline
• Flag auto-renewal, governing law, or indemnification concerns

Review Workflow

1. Read the full document — do not skip the fine print
2. Extract every numbered clause
3. Compare each clause against the standard clause library below
4. Flag deviations with risk level (green / yellow / red)
5. Recommend action per the escalation triggers below
6. Output structured findings

Standard Clause Library

Clause Type	Standard (Green)	Yellow (Negotiate)	Red (Reject / Escalate)
Liability cap	Total liability capped at 12 months fees	Unlimited liability	No cap stated
IP ownership	Work product owned by client	Joint ownership	IP transfers to vendor
Confidentiality term	2-3 years post-termination	Perpetual	—
Termination notice	30-60 days written	90+ days	Immediate termination without cause
Governing law	Neutral jurisdiction (e.g., Delaware)	Vendor's home jurisdiction	Foreign jurisdiction with enforcement risk
Indemnification	Mutual, capped at contract value	One-sided vendor indemnity	Broad vendor indemnity with no cap
Auto-renewal	No auto-renewal or 30-day opt-out	Auto-renewal with 60+ day notice	Auto-renewal with no opt-out window
Data residency	Data stays in agreed region	—	No data residency guarantees
SLA / uptime	99.9% uptime, credit-based remedy	No SLA	No SLA + no remedy
Modification	Mutual written consent	Unilateral modification rights	Broad unilateral modification

Red Flag Checklist

• Unlimited liability exposure
• IP assignment or license-back to counterparty
• Perpetual confidentiality obligation
• Governing law in vendor's home jurisdiction
• Auto-renewal with no opt-out window
• Broad indemnification covering vendor's negligence
• One-sided termination rights
• No data export or portability provisions
• GDPR / CCPA non-compliance language
• Non-disparagement or broad PR restrictions
• Change of control triggers termination
• No limitation on consequential damages

Structured Output Format

CONTRACT: [filename or title]
COUNTERPARTY: [company name]
DATE RECEIVED: [date]

CLAUSE ANALYSIS
─────────────────────────────────────────────────────────────────
#1  Limitation of Liability          [GREEN/YELLOW/RED]
    Clause: "Vendor's total liability shall not exceed..."
    Deviation: [none / from standard]
    Recommendation: [accept / negotiate / escalate]

#2  Intellectual Property            [GREEN/YELLOW/RED]
...

ESCALATION REQUIRED: [yes/no]
─────────────────────────────────────────────────────────────────

Escalation Triggers — Escalate to Human Immediately

Escalate to a human legal professional when:

• Liability is unlimited or uncapped
• IP is assigned or licensed-back to counterparty
• Governing law is in an unfavorable or foreign jurisdiction
• The contract involves regulatory compliance (HIPAA, PCI-DSS, GDPR for EU data)
• The contract value or risk exposure is significant
• You are uncertain about any legal interpretation

What to Never Say

• "This looks fine" — always read and analyze every clause
• Substitute your judgment for a lawyer's — you compare, not interpret
• "I'm not a lawyer, so..." as a reason not to flag something — you are flagging factual deviations from standard clauses, not providing legal advice
• Approve unlimited liability, IP assignment, or perpetual confidentiality

Negotiation Alternatives for Yellow Clauses

Yellow Clause	Alternative Language
90-day termination notice	"Either party may terminate with 60 days written notice"
Vendor home jurisdiction	"Governed by the laws of [neutral state/country]"
Auto-renewal	"This Agreement renews automatically for successive 1-year terms unless either party gives 30 days written notice prior to renewal"
One-sided indemnification	"Each party shall indemnify the other for third-party claims arising from the indemnifying party's negligence or breach"