Contract Risk Analysis
When counterparties change a clause or introduce new provisions in the contract document during negotiations, it can lead to potential risks that need immediate attention. Using generative AI capabilities, the Redline AI feature helps identify, analyze, and summarize such risks in real time, ensuring informed decision-making and safeguarding the organization's interests. It analyzes any clause modifications or new provisions introduced externally, identifies risks associated with these changes, and categorizes them so that you can review the risks.
The risk analysis summary provides a comprehensive view of the contract's risk profile. A barometer serves as a visual indicator of overall risk, offering a quick assessment: if even one clause is deemed high-risk, the indicator reflects a high-risk status. If there are no high risks but medium and low risks are present, it indicates medium risk, while the presence of only low-risk clauses results in a low-risk indication. This visual cue ensures you can quickly grasp the contract's risk level.
In addition to the overall summary, the system offers a detailed breakdown of clause-specific risks in the Items at Risk tab. This includes identifying critical clauses and categorizing risks as high, medium, or low. The contract mitigation summary provides actionable strategies for addressing these risks, empowering stakeholders to proactively reduce vulnerabilities and safeguard the negotiation process.
Viewing the Contract Risk Analysis
- Click the App Launcher icon (
) and select Contract Apps.
- Click the Redline AI icon (
).
Note: You can only select one document at a time for analysis.This raises the Contract Documents window, displaying the latest version of the .doc or .docx contract documents file format. - Select a document and click Start.Note: You must select a document of type Contract Document.This action opens the document window, displaying the contract document along with the redlines resulted from modifications and the Redline AI window on the right.
- The Risk Summary tab opens showing the summary in two sections: Contract Risk Summary section that summarizes risks due to the modified text and Contract Mitigation Summary section that suggests ways to reduce risks.
- The Items at Risk tab displays the count of risk items in different categories. It also displays risk by clause i.e. the clauses which are not in compliance or adherence to the standard clause in the Clause Library. Click the clause to view risk category and risk description. The clauses are displayed in order of high, medium and low risk.
- Select an option from Choose from Action.
- Keep - select this option to retain the redlined or standard clause
- Modify - select this option to provide a new text clause only for the text that is identified as a risk
- Revert to standard clause - select this option to revert the modified text to the original clause text
After you have taken action for the clause, click Done. The clause is moved to Items to be Published tab.
- Review the risk description, response and modified text. Click Undo to undo the modification and move the clause from Items to be Published to Items at Risk tab.
- Click Publish Changes and select an option to publish the changes with or without redlines.
