Contract Review

How to Review a Contract Without Missing the Red Flags

Contract review is pattern recognition at scale. Experienced lawyers don't read contracts word by word — they scan for structure, then zoom into the clauses that matter. The challenge for everyone else: you don't know which clauses matter until you've seen a hundred contracts. Structured extraction helps by pulling out the key terms so you know where to focus your attention.

Read the Termination Clause First

Most people read contracts front to back. Start with termination instead. How do you get out of this agreement? What triggers early termination? What's the notice period? What happens to your data? The termination clause reveals the true power dynamic of the contract. If it's hard to leave, every other term matters more.

Auto-Renewal Windows Are a Trap

A 90-day notice window for non-renewal sounds reasonable until you forget to send the letter and get locked into another year. Calendar the notice deadline immediately. Better yet, negotiate for 30-day notice or remove auto-renewal entirely. This is the single most common "gotcha" in SaaS contracts.

Liability Caps Should Match Contract Value

A liability cap of "12 months of fees paid" on a $240K/year contract means the maximum you can recover is $240K — even if a data breach costs you millions. For high-value or high-risk contracts, negotiate the cap to 24 months or uncapped for certain categories (data breach, IP infringement, confidentiality violations). The carve-outs matter as much as the cap.

Late Payment Interest Tells You About the Vendor

1.5% per month is 18% APR — more expensive than most credit cards. This is a negotiation signal. Vendors with aggressive late payment terms are either cash-flow sensitive or using it as leverage. Counter with 1% or prime + 2%. If they won't budge, it tells you something about the relationship.

IP and Data Ownership: Know What You're Giving Up

"Provider retains all IP" is standard for software licenses. What's not standard — and should raise a flag — is when the provider gets broad rights to your data beyond what's needed for service delivery. Watch for phrases like "Provider may use Customer Data to improve its services" or "for benchmarking purposes." These give the vendor rights to learn from your proprietary data.

Red Flags Are Where the Negotiation Starts

A red flag doesn't mean the contract is bad — it means there's a clause worth discussing. Auto-renewal traps, one-sided termination rights, aggressive interest rates, missing data deletion terms — these are all negotiable. The first step is finding them. Struq's Contract Review template surfaces these red flags so you know exactly where to focus your negotiation.

Let AI Do the First Pass

Paste the contract text into Struq. The Contract Review template extracts parties, dates, terms, obligations, payment details, termination clauses, liability caps, IP terms, and red flags. Use this as your starting point for detailed review — it catches the clauses a tired reviewer at 11 PM might miss.