Contract Comparison

Step 2: Structural Comparison

Map the structure of both documents:

• Identify sections/clauses present in both
• Identify sections/clauses present only in Document A (removed)
• Identify sections/clauses present only in Document B (added)
• Note any renumbering or reorganization

Step 3: Clause-by-Clause Comparison

For every section that exists in both documents, compare the text and classify the difference:

Change Types:

• Added: New clause present only in the later version / Document B
• Removed: Clause present only in the earlier version / Document A
• Modified - Substantive: Language changed in a way that affects rights, obligations, or risk
• Modified - Cosmetic: Language changed but meaning is essentially the same (formatting, word choice, grammar)
• Unchanged: Identical in both documents

For each change, determine:

1. Favorability: Does this change favor Party A, Party B, or is it neutral?
2. Significance: Rate as Major, Minor, or Cosmetic
   • Major: Changes rights, obligations, liability, financial terms, or risk allocation
   • Minor: Adjusts scope, timing, or procedural requirements without fundamentally changing the deal
   • Cosmetic: Formatting, grammar, renumbering, or synonym substitution with no substantive impact

Step 4: Flag Dangerous Patterns

Specifically watch for and call out:

• Sneaked-in clauses: New sections added that significantly change risk allocation, especially if buried in boilerplate sections
• Stripped protections: Liability caps, warranty protections, termination rights, or other safeguards that were in Version A but removed in Version B
• Scope expansion: Definitions or obligations that were quietly broadened
• Financial term changes: Any modification to payment terms, fees, penalties, or caps
• Termination changes: Modifications to how, when, or why either party can exit
• Indemnification drift: Indemnification obligations that became broader or uncapped
• IP rights shift: Changes in who owns what intellectual property
• Governing law/venue changes: Jurisdiction or dispute resolution venue switched
• Unilateral amendment rights: New ability for one party to change terms without consent

Step 5: Generate the Output

Write a file called CONTRACT-COMPARISON.md in the current working directory. Follow this structure:

# Contract Comparison Analysis

> **LEGAL DISCLAIMER**: This analysis is generated by an AI assistant and does not constitute legal advice. It is intended for informational and educational purposes only. No attorney-client relationship is created by using this tool. Contract law varies by jurisdiction, and specific terms may be interpreted differently depending on applicable law, industry customs, and the full context of the parties' relationship. Always consult a qualified attorney licensed in your jurisdiction before making legal decisions or signing contracts.

## Document Overview

| Field | Document A | Document B |
|---|---|---|
| **Document Name** | [name/path] | [name/path] |
| **Contract Type** | [type] | [type] |
| **Parties** | [parties] | [parties] |
| **Date/Version** | [date/version] | [date/version] |
| **Comparison Type** | [Two versions of same contract / Two different contracts] | |
| **Analysis Date** | [today] | |

## Executive Summary

[2-3 sentences summarizing the overall direction of changes. Who do the changes collectively favor? Is the newer version significantly more or less risky?]

**Overall Favorability Shift**: [Strongly favors Party A / Slightly favors Party A / Neutral / Slightly favors Party B / Strongly favors Party B]

## Change Summary Table

| # | Section | Change Type | Significance | Favors | Risk Impact |
|---|---|---|---|---|---|
| 1 | [section] | Added/Removed/Modified | Major/Minor/Cosmetic | A/B/Neutral | [HIGH/MEDIUM/LOW RISK] |
| ... | ... | ... | ... | ... | ... |

**Totals**: [X] Major changes, [X] Minor changes, [X] Cosmetic changes
**Favor Distribution**: [X] favor Party A, [X] favor Party B, [X] neutral

---

## DANGEROUS CHANGES (Requires Immediate Attention)

### [Dangerous Change #1]

**Type**: [Sneaked-in clause / Stripped protection / Scope expansion / etc.]
**Section**: [section reference]

**Document A (Before)**:
> "[exact text, or 'Not present']"

**Document B (After)**:
> "[exact text, or 'Removed']"

**What Changed**: [plain English explanation]

**Why This Is Dangerous**: [specific explanation of the risk this creates]

**Risk Level**: [HIGH/MEDIUM/LOW RISK]

**Recommendation**: [what to do about it]

---

## Detailed Change Analysis

### Change #1: [Section Title]

**Change Type**: [Added/Removed/Modified - Substantive/Cosmetic]
**Significance**: [Major/Minor/Cosmetic]
**Favors**: [Party A / Party B / Neutral]

**Document A**:
> "[exact text]"

**Document B**:
> "[exact text]"

**What Changed**:
[Plain English explanation of the difference]

**Impact Assessment**:
[What this change means practically for each party]

---

[Repeat for each change]

---

## Sections Unchanged

[List sections that are identical in both documents - this is useful to confirm what was NOT changed]

## Recommendation

**Which version is more favorable?**: [Document A / Document B] is more favorable for [Party name] because:

1. [Reason 1]
2. [Reason 2]
3. [Reason 3]

**If you must sign Document B, prioritize pushing back on**:
1. [Most critical change to reverse]
2. [Second most critical]
3. [Third most critical]

Important Guidelines

• Quote exact text from both documents. Do not paraphrase when showing differences.
• Be precise about what changed. "The indemnification section was modified" is not enough. Explain exactly which words changed and what the impact is.
• Cosmetic changes still get listed, but clearly marked as cosmetic so the reader can skip them.
• If the two documents are entirely different contracts (not versions), focus the comparison on how equivalent sections compare rather than tracking "changes."
• Always provide a clear bottom-line recommendation on which document is more favorable and why.