Contract First-Pass Review

# Contract First-Pass Review

Produces a first-pass issues memo on a commercial contract so the attorney can see the deal terms, the riskiest clauses for the client, and which way to push before marking up the draft.

## What to ask for
- The contract (full text, including exhibits, schedules, SOWs and any terms incorporated by reference or URL).
- **Which side the client is on** (customer or vendor, buyer or seller, licensor or licensee). If not given, ask once; if still unknown, review from both sides and label each issue.
- The client's business goals and deal-breakers, if known (e.g. must be able to exit in year one, cannot accept uncapped liability).
- Deal context: value, length, how critical the relationship is, the client's leverage.
- If anything is missing, review what's there and mark gaps as [MISSING: ...]. Never assume the contents of an exhibit or linked terms you haven't seen.

## How to work
1. **Read the whole document first**, including definitions. Note the parties' exact legal names and whether they match the signature blocks.
2. **Key terms.** Pull the business terms: parties, effective date, term, renewal, price and payment, deliverables or scope, service levels, termination rights, governing law and venue.
3. **Risk review, from the client's side.** For each, quote or cite the section and say who it favors:
   - **Indemnity:** who indemnifies whom, for what (third-party claims only or direct losses too), IP infringement indemnity, defense and control of claims, carve-outs, whether it sits inside or outside the liability cap.
   - **Limitation of liability:** cap amount and basis (fees paid, fees in last 12 months, fixed sum), mutual or one-way, exclusion of consequential damages, carve-outs (confidentiality, data breach, indemnity, gross negligence, willful misconduct).
   - **IP:** who owns deliverables, pre-existing IP, license scope and duration, work-made-for-hire and assignment language, feedback clauses, use of client data (including for training or analytics).
   - **Termination:** for convenience (who has it, notice), for cause, cure periods, effect of termination, refunds, transition assistance, survival.
   - **Auto-renewal:** renewal length, notice window to opt out, price increases on renewal.
   - **Assignment and change of control:** consent requirements, whether a sale of the client's business triggers consent or termination.
   - **Governing law, venue, disputes:** forum, arbitration, jury waiver, fee-shifting, class waiver.
   - **Payment:** timing, late fees and interest, disputed invoices, set-off, taxes, expenses, price escalators.
   - **Non-compete, non-solicit, exclusivity:** scope, duration, geography, and whether they bind the client's affiliates.
   - Also check: warranties and disclaimers, confidentiality, data protection and security, insurance requirements, audit rights, unilateral amendment rights ("we may update these terms"), order of precedence, entire-agreement clause.
4. **Rank** each issue High / Medium / Low by business impact on this client, not by how unusual the clause is.
5. **Redline direction.** For each High and Medium issue, say which way to push (e.g. "make mutual", "add cap carve-out for their data breach", "add 30-day cure"). Direction only; don't draft final language unless asked.
6. **Questions for the client.** Business facts the attorney needs to decide the position (e.g. "Do you ever need to end this early?").

## Output

**First-Pass Review: [Contract name]**  Client: [party], acting as [side]  Reviewed: [date]

1. **Snapshot** (3-4 lines): what the deal is, overall balance (client-favorable / balanced / one-sided against client), top concern.
2. **Key terms** table: Term | Section | What it says | Note
3. **Issues, risk-ranked** table: # | Risk (H/M/L) | Issue | Section | Who it favors | Why it matters to the client
4. **Suggested redline direction** (numbered, keyed to issue #)
5. **Missing or referenced documents** (exhibits, policies, URLs not provided)
6. **Questions for the client** (numbered)
7. **To verify** (jurisdiction-specific points, e.g. enforceability of non-competes, auto-renewal notice laws, limits on liability waivers)

## Rules
- Draft for attorney review; not legal advice to the client.
- Enforceability of non-competes, auto-renewal disclosure rules, and limits on indemnity and liability waivers vary by state and change: list them under "To verify" with what to check, never state them as settled.
- Never invent facts, dates, amounts, case law or citations. Unknown = [MISSING].
- Always cite the section number for every issue. If the contract is unnumbered, quote the first few words of the clause.
- Rank risk from the client's side only; a "standard" clause can still be High if it hurts this client.
- Don't call a term "market" or "unenforceable" as a conclusion; say "discuss" or put it under "To verify".
- Flag anything incorporated by reference but not provided as a risk in itself.