Contract review is one of the most time-consuming tasks in legal practice — and one of the best use cases for AI. A corporate attorney I spoke with estimates that AI cuts her initial contract review time by 60%. Not because AI catches everything. Because it catches the obvious stuff instantly, freeing her to focus on the nuanced issues that actually require legal judgment.

These prompts work with any general AI tool (ChatGPT, Claude). For sensitive contracts, use your firm’s approved AI platform or a legal-specific tool like Spellbook.

1. Initial Risk Scan

“Review this contract and flag: unusual or non-standard clauses, terms that heavily favor one party, missing standard protections (indemnification, limitation of liability, termination rights, IP ownership), ambiguous language that could be interpreted multiple ways, and any clause that creates unlimited liability or open-ended obligations. Organize findings by risk level: high, medium, low. For each flag, explain why it’s a concern in 1-2 sentences. Contract: [paste contract].“

2. Plain English Summary

“Summarize this contract in plain English that a non-lawyer business person would understand. Include: what each party is agreeing to do, key financial terms (payment, penalties, fees), important dates and deadlines, how either party can end the agreement, and the 3 most important things the client should know before signing. Under 300 words. No legal jargon. Contract: [paste contract].“

3. Clause-by-Clause Analysis

“Analyze this specific clause: [paste clause]. Explain: what it means in practice, which party it favors and why, potential risks for [my client’s position], how this compares to standard market terms for [type of agreement], and suggested revisions to make it more balanced. If this clause is standard and acceptable, say so — don’t flag everything as risky.”

4. Compare Against Playbook

“I’m reviewing a [type of agreement]. Our standard positions are: [list your firm’s/client’s standard terms — e.g., ‘liability capped at contract value,’ ‘mutual indemnification,’ ‘30-day termination for convenience,’ ‘IP created under contract belongs to client’]. Compare this contract against our standard positions. For each deviation, note: what the contract says vs. our standard, the risk level of the deviation, and whether it’s worth negotiating or acceptable.”

5. Generate Redline Suggestions

“Review this clause and suggest specific redline edits. I represent [which party]. Current clause: [paste clause]. For each suggested edit: show the revised language, explain what the change accomplishes, and rate how likely the other side is to accept it (likely, possible, unlikely). Prioritize edits by importance — start with the changes that matter most.”

6. Indemnification Analysis

“Analyze the indemnification provisions in this contract. Identify: Is it mutual or one-sided? What triggers indemnification? Are there any carve-outs or exceptions? Is there a cap on indemnification liability? Does it cover third-party claims, direct damages, or both? Are consequential damages included or excluded? Compare to standard market terms for [type of agreement] and flag anything unusual. Contract: [paste relevant sections].“

7. Termination Rights Review

“Review the termination provisions in this contract. For each party, identify: termination for convenience (notice period, fees), termination for cause (what constitutes cause, cure period), termination for insolvency/bankruptcy, what happens to obligations after termination (survival clauses), and any automatic renewal terms. Flag any imbalance between the parties’ termination rights. Contract: [paste relevant sections].“

8. IP and Confidentiality Check

“Review the intellectual property and confidentiality provisions. Identify: Who owns IP created during the engagement? Are there work-for-hire provisions? What’s covered by confidentiality (and what’s excluded)? How long does confidentiality last? Are there non-compete or non-solicitation clauses? Can confidential information be shared with subcontractors? Flag anything that could restrict [my client]‘s business operations beyond what’s reasonable.”

9. Payment Terms Analysis

“Analyze the payment terms in this contract. Identify: payment amounts and schedule, what triggers payment (milestones, deliverables, time-based), late payment penalties and interest, expense reimbursement terms, right to withhold payment and under what conditions, price escalation or adjustment clauses, and currency and tax provisions. Flag any terms that create cash flow risk for [my client]. Contract: [paste relevant sections].“

10. Negotiation Strategy

“Based on this contract review, help me prioritize my negotiation strategy. The key issues I’ve identified are: [list 5-7 issues from your review]. For each issue: rate its importance (must-have, important, nice-to-have), suggest my opening position, identify a reasonable compromise, and note what I might concede in exchange. Also suggest 2-3 issues where I should hold firm and explain why.”

The Contract Review Rule

AI is excellent at pattern matching — finding standard clauses, spotting deviations, and flagging obvious risks. It’s terrible at understanding business context — why a particular term matters for this specific deal, what the relationship dynamics are, and whether a risk is theoretical or real.

Use AI for the first pass. Apply your judgment for the final analysis. And never send AI-generated redlines to opposing counsel without reviewing every suggested change yourself.

Related reading: AI for Legal Document Drafting — Contracts, Letters, and Motions · AI for Due Diligence — Speed Up Document Review Without Missing Red Flags · Spellbook Review — AI Contract Drafting Inside Microsoft Word

🛠️ Need to draft a contract? Try our Legal Document Drafter — generates NDAs, contractor agreements, and more.