Find risky contract clauses instantly
AI scans contracts and highlights dangerous provisions with warning comments. Catch red flags before signing.
Find risky contract clauses instantly
River's Contract Red Flag Highlighter scans contracts and identifies potentially dangerous provisions. The AI reviews the entire contract looking for one-sided terms, excessive liability, unfavorable payment terms, broad indemnification, IP assignment, auto-renewal, and other risky clauses. It adds warning comments highlighting each red flag with brief explanations of the concern. Within minutes, you have annotated contracts showing every provision requiring careful review. Perfect for paralegals conducting initial reviews, in-house counsel evaluating vendor contracts, and attorneys quickly identifying negotiation priorities.
Unlike manual review that might miss subtle problems, systematic AI scanning finds common red flags consistently. The AI identifies provisions like unlimited liability, one-way indemnification, automatic renewals with short cancellation windows, broad IP assignments, venue in inconvenient locations, short deadlines, mandatory arbitration with unfavorable terms, no termination rights, and excessive penalties. You get comprehensive red flag identification that helps prioritize review and negotiation efforts.
This tool is perfect for paralegals conducting initial contract reviews, in-house counsel managing high volumes of vendor contracts, attorneys quickly triaging deals, procurement teams evaluating proposals, and anyone reviewing unfamiliar contracts. Use it when receiving contracts from counterparties, before signing vendor agreements, when evaluating proposals, or anytime you need fast identification of problematic terms. Great for training junior attorneys on what to look for. The AI creates systematic review that catches issues experienced reviewers would flag.
Common Contract Red Flags
Unlimited liability exposure is a major red flag. Contracts without liability caps or consequential damages exclusions create unlimited downside risk. A $10,000 contract could create $1 million liability. Look for limitation of liability clauses capping exposure and excluding consequential damages. Their absence is a red flag requiring negotiation. Similarly, one-way indemnification where you indemnify the other party but receive no indemnity is concerning. Mutual indemnification or no indemnification is more balanced than one-way obligations.
Unfavorable payment terms create cash flow and leverage problems. Payment due in advance with no refunds, long payment terms for what you're owed but short terms for what you owe, automatic price increases without caps, and provisions allowing withholding of payment without dispute requirements all favor the other party. Look for balanced payment terms with reasonable due dates, clear dispute procedures, and refund rights for prepaid amounts if services aren't delivered. Payment terms often reveal which party has stronger bargaining power.
IP assignment and work-for-hire provisions can cost you valuable rights. Clauses assigning all IP you create to the other party, even IP unrelated to the contract, are overreaching. Work-for-hire provisions making the other party the author of your work transfer fundamental ownership. Background IP assignment (your pre-existing IP) is particularly problematic. Reasonable contracts grant licenses for contracted work while protecting your background IP and IP unrelated to the contract. Overly broad IP provisions can devastate your business by giving away core technology or products.
What You Get
Comprehensive contract scan for risky provisions
Warning comments highlighting each red flag
Brief explanations of why each provision is concerning
Priority identification for negotiation focus
Systematic review catching common problems
How It Works
- 1Upload contractProvide contract to review for red flags
- 2AI scans documentOur AI analyzes entire contract in 3-5 minutes, identifying risky clauses
- 3Review red flagsSee warning comments on every problematic provision
- 4Negotiate improvementsUse red flag analysis to prioritize negotiation points
Frequently Asked Questions
Does this replace attorney review?
No. This tool helps attorneys and paralegals conduct more efficient review by identifying common red flags systematically, but attorney judgment is essential for determining which provisions are truly problematic in your specific context. What's a red flag in one deal might be acceptable in another based on business needs, industry norms, and bargaining leverage. Use this tool to organize and prioritize review, then have attorneys evaluate flagged provisions considering your specific situation.
What if the tool flags provisions that are actually acceptable?
The tool flags provisions that are commonly problematic or one-sided, but context matters. Some flagged provisions might be industry standard, commercially necessary, or acceptable given the deal terms. Not every red flag requires negotiation. Use the tool to ensure you see and consider potentially problematic provisions, then exercise judgment about which ones to negotiate based on your priorities, leverage, and business needs. The tool ensures you don't miss issues; you decide which issues matter most.
Can this analyze contracts in any industry?
The tool identifies common contractual red flags that apply across industries (unlimited liability, one-way indemnification, IP assignment, etc.). However, industry-specific concerns might require specialized review. For example, healthcare contracts have specific regulatory provisions, real estate contracts have particular disclosure requirements, and construction contracts have specialized risk allocation. Use this tool for general contractual red flags, then supplement with industry-specific expertise for specialized provisions.
What should I do with the red flag analysis?
Use it to prioritize negotiation efforts. Not every red flag will be negotiable, so focus on the most important issues. Group red flags by category (liability, IP, payment, termination) and determine which categories matter most for this deal. Present red flags to business teams to assess commercial acceptability. Prepare negotiation positions for priority issues. Some red flags might be deal-breakers (unlimited liability), others might be negotiable (venue provisions), and some might be acceptable given other favorable terms. Strategic negotiation requires prioritizing issues.
How comprehensive is the red flag identification?
The tool systematically identifies common contractual red flags based on established legal principles and best practices. However, it might not catch every issue, especially unusual or industry-specific problems, contracts with unclear drafting, or sophisticated schemes that hide unfavorable terms. Use this as one layer of review alongside attorney analysis, business review, and risk assessment. It catches common issues reliably but doesn't replace comprehensive legal review for high-value or complex contracts.
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