Contract Review Pre-Signature Process

A Contract Review Pre-Signature Process is a contract-related pre-signature sub-process that accepts a drafted contract and produces a redlined contract.

• AKA: Critical Contract Evaluation.
• Context:
  • input: Draft Contract.
  • output: Contract Review Issues (e.g. within a redlined contract).
    • option: Redlined Contract Summary.
  • measure: Contract Review Quality Measure, Contract Review Accuracy Measure, Contract Review Effort Measure, Contract Review Timeliness Measure, ...
  • It can (typically) includes one or more Contract Review Instances which recognizes Contract Issues (to ensure its contract legality, contract enforceability, and protection of the legal party interests.
  • It can (typically) be performed by Legal Professionals (possibly a contract review expert) from an in-house legal department.
  • It can (typically) be a member of Contract Lifecycle Management and be preceded by Contract Drafting (where initial terms and conditions are laid out).
  • It can (typically) be a part of a Contract Management Process and occur between contract drafting and contract execution.
  • It can (often) involve collaboration between Legal Professionals and Contract Stakeholder.
  • It can (often) involve Contract Law Research.
  • It can range from being a Informal Contract Review Pre-Signature Sub-Process to being a Formal Contract Review Pre-Signature Sub-Process.
  • It can range from being a Pre-Signature Contract Review to being a Post-Signature Contract Review.
  • It can range from being an Initial Contract Review to being a Concluding Contract Review.
  • It can range from being an Superficial Contract Review to being an In-Depth Contract Review.
  • It can range from being a Human-Performed Contract Review to being an AI-Supported Contract Review.
  • It can range from being a Simple Contract Review to being a Complex Contract Review.
  • It can support Contract-Related Decision-Making, such as ...
  • It can be supported by a Contract Review-Supporting System (including contract review chatbots).
  • It can be represented by a Contract Review Pre-Signature Process Model.
  • ...
• Example(s):
  • a Bank of America Contract Review Pre-Signature Process (by Bank of America, Corp.).
  • a Microsoft Contract Review Pre-Signature Process (by Amazon, Inc.).
  • a WalMart Contract Review Pre-Signature Process (by Walmart, Inc.).
  • a Contract Risk Identification.
  • a Contract Error Identification.
  • a Contract Inconsistency Identification.
  • a Contract Improvement Suggestion.
  • a Contract Compliance Review.
  • a Contract Original-to-Revised Comparison
  • a Contract-Type Specific Review Task, such as: NDA review (of NDAs) or Purchase Agreement review (of purchase agreements).
  • a Contract Review Benchmark Task, such as Contract Understanding Atticus Dataset (CUAD).
  • ...
• Counter-Example(s):
  • Legal Document Drafting Process: Creating initial drafts of contracts, agreements, or legal documents from scratch or using templates.
  • Contract Negotiation: Engaging in discussions with other parties to reach a consensus on the terms and conditions of a contract before finalizing it.
  • Electronic Legal Discovery Process: ...
  • Due Diligence: Conducting a comprehensive analysis of a business, individual, or entity to evaluate potential risks and opportunities before entering into an agreement or transaction.
  • Litigation Support: Assisting in the preparation, management, and execution of legal proceedings, such as discovery, evidence review, and case strategy development.
  • Intellectual Property Management: Identifying, protecting, and managing intellectual property assets, such as patents, trademarks, and copyrights.
  • Regulatory Compliance: Ensuring that an organization adheres to all applicable laws, regulations, and industry standards.
  • Dispute Resolution: Facilitating the resolution of conflicts and disputes between parties through negotiation, mediation, or arbitration, as alternatives to litigation.
  • a Legislation Review (of statutory legislation).
  • a Criminal Case Review (of criminal cases).
• See: Contract Drafting, Contract Execution, Contract Negotiation, Legal Compliance, Legal Document Analysis, Legal Review Process, Risk Management, Stakeholder Collaboration.

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References

2024

• LLM

Type of Contract	Description	Estimated Timeframe	Factors Influencing Duration	Methods to Improve Efficiency
Simple Contract	Standard terms, low complexity	A few hours to a day	Low complexity, standard terms	Use of AI tools, comprehensive checklists
Moderately Complex Contract	Custom terms, moderate complexity	Several days to a week	Moderate complexity, custom terms	Regular training, stakeholder involvement
Highly Complex Contract	Detailed and customized terms, high complexity	One to several weeks	High complexity, multiple parties involved	Advanced legal expertise, use of contract review software
Bulk Review Projects	High volume of contracts	Several weeks to months	High volume, varied complexity	Automated workflows, centralized contract repository
Example Scenarios
Simple NDA Review	Non-Disclosure Agreement, straightforward terms	2-4 hours	Low complexity, standard terms	AI-assisted review, checklists
Standard Commercial Lease Agreement	Lease of commercial property with standard terms	1-3 days	Moderate complexity, some customization	Training for legal staff, stakeholder reviews
Complex Partnership Agreement	Detailed partnership terms, multiple parties involved	1-2 weeks	High complexity, detailed terms, multiple stakeholders	Legal expertise, AI tools, detailed checklists
Large-scale M&A Due Diligence	Mergers and Acquisitions, extensive review required	Several weeks to a few months	Very high complexity, significant financial implications	Advanced legal teams, automated due diligence tools

2023

• (Open AI ChatGPT, 2023) ⇒ https://chat.openai.com Retrieved: 2023-07-30.
  • Q: What is a "Legal Contract Review Task"?
  • A:A "Legal Contract Review Task" refers to the process of examining and analyzing a legal contract to assess its terms, conditions, and potential risks. This task is typically undertaken by legal professionals, such as lawyers or paralegals, with expertise in contract law. During a contract review, the legal team carefully scrutinizes each clause, provision, and obligation outlined in the agreement to ensure that it aligns with the client's interests and complies with applicable laws and regulations.

    The objectives of a legal contract review task include:

    • 1. Identifying Potential Issues: The legal team looks for any ambiguous language, loopholes, or potential risks that may leave their client vulnerable to unfavorable outcomes or legal disputes.
    • 2. Ensuring Compliance: The contract must adhere to relevant laws, regulations, and industry standards to prevent any potential legal liabilities or breaches.
    • 3. Protecting Client Interests: By thoroughly analyzing the contract, the legal professionals aim to safeguard their client's rights, assets, and other interests, while negotiating for more favorable terms if necessary.
    • 4. Providing Legal Advice: Based on their findings during the contract review, the legal team advises their client on the implications and consequences of entering into the agreement.

Overall, a legal contract review task plays a crucial role in ensuring that contractual agreements are well-drafted, enforceable, and mutually beneficial for all parties involved. It is an essential step in any business transaction or legal arrangement to mitigate potential risks and establish a solid foundation for the parties' relationship.

2022

• (Koreeda & Manning, 2021) ⇒ Yuta Koreeda, and Christopher D. Manning. (2021). “ContractNLI: A Dataset for Document-level Natural Language Inference for Contracts.” doi:10.48550/arXiv.2110.01799
  • QUOTE: Reviewing contracts is a time-consuming procedure that incurs large expenses to companies and social inequality to those who cannot afford it. In this work, we propose " document-level natural language inference (NLI) for contracts ", a novel, real-world application of NLI that addresses such problems. In this task, a system is given a set of hypotheses (such as " Some obligations of Agreement may survive termination. “) and a contract, and it is asked to classify whether each hypothesis is " entailed by ", " contradicting to " or " not mentioned by " (neutral to) the contract as well as identifying " evidence " for the decision as spans in the contract. ...

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