Risk Framework
The Risk Framework is a structured severity classification model built into Redline. When you run Redline on a third-party contract, it does not just identify unfavorable language, it also tells you how serious each finding is. Every unfavorable condition detected is assigned to one of three risk tiers: High, Medium, or Low. This gives you and your legal team an immediate, prioritized view of which contracts need urgent attention and which contain only minor concerns, without having to read through every finding individually.
Risk Tiers
| Risk | Description |
| High | Deal-breakers or terms that require immediate escalation. These are conditions your organization considers non-negotiable. |
| Medium | Negotiation points that need attention before the contract can be accepted. These are conditions your organization prefers to revise but may accept under certain circumstances. |
| Low | Minor concerns or preferences. These are conditions that deviate from your organization's standard position but do not materially impact the agreement. |
If no unfavorable conditions are found in a clause, the clause is classified as No Risk.
If no risk item is defined for a rule, the clause is classified as Undefined.
How Risk Is Determined
Administrators assign risk tiers when configuring rules in the Rules Library. Each unfavorable condition in a rule is placed into a specific tier, High, Medium, or Low, based on how your organization has defined its risk tolerance for that clause type. For more information, see Rules Library
When Redline evaluates a contract:
Each rule is evaluated independently. If a rule triggers unfavorable conditions across multiple tiers, the rule is classified at the highest tier triggered. For example, if a Limitation of Liability rule triggers both a Medium and a Low condition, the rule is classified as Medium Risk.
The overall contract risk category is determined by the highest rule-level classification across all rules evaluated. For example, if one rule is classified as High and all others are Medium or Low, the contract risk category is High.
This waterfall model means you can look at the overall contract risk category and immediately know the worst-case finding without reviewing every clause.