---
name: contract-risk-flag-detector
description: "Scans a pasted contract or contract excerpt and returns a structured risk report flagging high-risk clauses, missing standard provisions, and unusual or non-market terms — each with a severity rating, the specific risk it creates, and suggested redline language. Use when reviewing an inbound contract, redlining a vendor or customer agreement, triaging a contract before deeper legal review, or checking a draft for missing protections."
argument-hint: "[contract-text] [contract-type]"
allowed-tools: ["Read"]
---

# Contract Risk Flag Detector

## Purpose
Scan a contract or excerpt and surface the clauses that create real exposure — high-risk terms, one-sided provisions, and standard protections that are missing entirely — each rated by severity with the specific business/legal risk it creates and suggested redline language. Turns a slow first-pass review into a fast, structured triage that tells you exactly where to focus.

## When to Use
Invoke this skill when the user asks to:
- Review an inbound vendor, customer, MSA, NDA, or SaaS agreement for risk
- Flag problematic or one-sided clauses in a contract
- Check a draft or counterparty paper for missing standard protections
- Triage a contract before sending it to outside counsel or senior review
- Compare a term against typical market/standard positions
- Redline a specific section and get suggested replacement language

## Inputs Required
Before starting, collect:
- **Contract text**: The full contract or excerpt to review (pasted text)
- **Contract type**: NDA / MSA / SaaS / services agreement / vendor / employment / lease / other
- **Which side**: Are we the customer/buyer, the vendor/seller, or a mutual party?
- **Deal size / criticality**: Approximate value and how strategically important this counterparty is
- **Governing law / jurisdiction**: If specified in the contract or known
- **Known dealbreakers**: Any terms already flagged as non-negotiable by the business
- **Risk tolerance**: Conservative / balanced / aggressive posture for this deal

If side, jurisdiction, or risk tolerance is missing, assume a balanced posture reviewing from the customer's perspective and note the assumption.

## Instructions

### Step 1: Classify the Document and Set the Baseline
Identify the contract type and establish which standard provisions a well-drafted version of this contract type should contain. This baseline is what the "missing provisions" check runs against.

Common baseline provision sets by type:
- **SaaS/MSA**: limitation of liability, indemnification, data protection/security, SLA/uptime, termination rights, IP ownership, confidentiality, warranty, insurance
- **NDA**: definition of confidential info, permitted use, term/survival, return/destruction, carve-outs (public/independently developed), residuals clause check
- **Services**: scope/SOW mechanics, acceptance criteria, payment terms, IP/work-product ownership, subcontracting, termination for convenience
- **Vendor/procurement**: pricing lock, audit rights, force majeure scope, assignment, most-favored-customer

Note the counterparty's paper vs. our template if identifiable — one-sided language is more likely on their paper.

### Step 2: Flag High-Risk Clauses Present in the Document
Read clause-by-clause and flag any that create exposure. For each flag, produce: clause name → severity → the specific risk → the offending language (quote it) → suggested redline.

Screen for these high-risk categories:
- **Unlimited or uncapped liability** — no cap, or carve-outs that swallow the cap (IP, confidentiality, data breach excluded)
- **One-sided indemnification** — you indemnify them broadly; they indemnify you narrowly or not at all
- **Auto-renewal traps** — evergreen renewal with short/onerous notice windows
- **Unilateral change rights** — counterparty can amend terms, pricing, or SLAs at will
- **Broad IP assignment** — assigning more IP or background IP than the deal requires
- **Unfavorable termination** — no termination for convenience, long lock-in, or termination penalties
- **Weak data/security terms** — no breach notification timeline, no security standard, unlimited subprocessor rights
- **Payment/pricing risk** — uncapped price escalation, unfavorable payment timing, interest/late fees
- **Jurisdiction/dispute traps** — inconvenient forum, mandatory arbitration with cost-shifting, jury waiver
- **Assignment/change-of-control** — counterparty can assign freely; you cannot
- **Vague or undefined key terms** — "reasonable," "material," "promptly" without definition on obligations that matter

### Step 3: Identify Missing Provisions
Compare the document against the Step 1 baseline. Flag any standard protection that is absent. For each: what's missing → why its absence is a risk → suggested clause to add. Prioritize missing terms that would be hard to fix after signing (liability cap, IP ownership, termination rights, data protection).

### Step 4: Flag Unusual / Non-Market Terms
Identify terms that deviate from typical positions for this contract type, even if not strictly "high-risk." Examples: unusually long confidentiality survival, atypical warranty disclaimers, non-standard payment cycles, uncommon liability structures. Label each as **more favorable / less favorable / neutral** to our side and note the market-standard alternative.

### Step 5: Assign Severity and Rank
Rate every flag on a 3-tier scale:
- **🔴 Critical** — likely dealbreaker or major exposure; escalate before proceeding
- **🟡 Moderate** — should be negotiated; acceptable only with tradeoffs
- **🟢 Minor** — worth noting; often acceptable as-is

Order the final report by severity, Critical first.

### Step 6: Produce the Risk Summary and Redline Playbook
Open with a 3-4 sentence executive summary: overall risk posture (High/Medium/Low), count of flags by severity, and the single most important issue to resolve. Close with a prioritized negotiation list — the top 5 items to push on, in order.

## Output Format
- **Structure**: Executive summary → risk flag table (or structured blocks) grouped by severity → missing provisions list → unusual terms list → top-5 negotiation priorities
- **Length**: 700–1,300 words depending on contract length and flag count
- **Format**: Structured document with a scannable flag table; each flag as: Clause | Severity | Risk | Quoted language | Suggested redline
- **Sections**: Executive Summary → High-Risk Clauses Flagged → Missing Provisions → Unusual/Non-Market Terms → Top 5 Negotiation Priorities
- **Tone**: In-house counsel — precise, plain-English, action-oriented; explains legal risk in business terms without hedging

## Quality Checklist
Before delivering output, verify:
- [ ] Every flag includes a severity rating (🔴/🟡/🔴) — no unrated items
- [ ] Every high-risk flag quotes the actual offending language from the contract, not a paraphrase
- [ ] Every flag includes suggested redline or replacement language — not just "negotiate this"
- [ ] Missing-provisions section is checked against the correct baseline for the stated contract type
- [ ] Flags are ranked by severity with Critical items first
- [ ] Top 5 negotiation priorities are specific and ordered — not a restatement of every flag
- [ ] Executive summary states an overall risk posture (High/Medium/Low) and the single top issue

## Notes
- This is a first-pass triage tool, not a substitute for qualified legal review — include a one-line reminder that flagged items should be confirmed by counsel before signing.
- The most commonly missing high-impact provisions are liability caps, breach-notification timelines, and termination-for-convenience rights — check for these even on polished-looking paper.
- If reviewing an excerpt rather than a full contract, note explicitly that missing-provision analysis is limited because absent clauses may exist elsewhere in the document.
- Undefined qualifiers ("reasonable," "material," "promptly") are frequently overlooked but carry real exposure on obligation-bearing clauses — flag them when they modify a party's duties.

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## How to use this skill

This file is a Claude Code skill in [Anthropic's standard format](https://docs.anthropic.com/en/docs/claude-code/skills) — markdown with YAML frontmatter at the top.

**Installing in Claude Code:**
- `~/.claude/skills/<folder-name>/SKILL.md` — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)
- `<your-project>/.claude/skills/<folder-name>/SKILL.md` — auto-loads only when working in that project (recommended for project-specific skills)

Restart Claude Code or open a new session to register.

**Using in Claude.ai, ChatGPT, Gemini, or other AI tools:**

1. Drag this file into a new chat, or copy and paste its contents
2. Send your task or request as your next message — the AI will apply the skill where it fits

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