Deep Risk Analysis

Evaluate each clause against these risk categories:

Step 3: Identify Hidden Risks

Specifically hunt for these patterns that are commonly missed:

• Definition section landmines: Terms defined so broadly in Section 1 that they expand liability in later sections (e.g., "Services" defined to include future unspecified work).
• Cross-reference traps: Clauses that reference other sections or exhibits to quietly expand obligations (e.g., "Subject to Section 12" where Section 12 contains a broad waiver).
• Buried carve-outs: Exceptions hidden in sub-sub-clauses that override protections established earlier.
• Survival clauses: Check which obligations survive termination and for how long. Flag any that survive indefinitely.
• Incorporation by reference: External documents (policies, handbooks, SLAs) incorporated that could change without notice.
• Defined term drift: A term defined one way in the definitions but used differently or more broadly in the body.

Step 4: For Each Risky Clause (Score 5+), Provide

1. Exact quoted text from the contract
2. Risk category from the table above
3. Risk score (1-10)
4. Risk indicator: Use the appropriate emoji:
   • Score 7-10: HIGH RISK
   • Score 4-6: MEDIUM RISK
   • Score 1-3: LOW RISK
5. Plain English explanation: What this clause actually means in everyday language
6. Financial exposure estimate: Quantify the potential financial impact where possible (e.g., "Could expose you to unlimited liability for third-party IP claims" or "Penalty of $X per day for late delivery with no cap")
7. Specific alternative language: Write actual replacement clause text that would be more balanced

Step 5: Generate the Output

Write a file called RISK-ANALYSIS.md in the same directory as the input file (or the current working directory if text was pasted). The file must follow this structure:

# Contract Risk 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 Summary

| Field | Value |
|---|---|
| **Contract Type** | [type] |
| **Parties** | [Party A] and [Party B] |
| **Effective Date** | [date] |
| **Governing Law** | [jurisdiction] |
| **Analysis Date** | [today] |

## Overall Risk Score: [X]/10

[1-2 sentence summary of the overall risk posture]

## Risk Matrix

| # | Clause/Section | Risk Category | Score | Indicator | Financial Exposure |
|---|---|---|---|---|---|
| 1 | [Section name] | [category] | [X]/10 | [HIGH/MEDIUM/LOW RISK] | [estimate] |
| ... | ... | ... | ... | ... | ... |

## Total Estimated Financial Exposure

[Aggregate the financial exposure estimates. Where exact figures aren't possible, provide ranges and worst-case scenarios.]

---

## Detailed Risk Analysis

### [Risk #1 - HIGH RISK] Section X.X: [Section Title]

**Risk Category**: [category]
**Risk Score**: [X]/10

**Contract Language**:
> "[exact quoted text from the contract]"

**Plain English Translation**:
[What this actually means in everyday language]

**Why This Is Risky**:
[Detailed explanation of the risk, including real-world scenarios where this could hurt you]

**Financial Exposure**:
[Quantified estimate of potential financial impact]

**Recommended Alternative Language**:
> "[specific replacement clause text]"

---

[Repeat for each risky clause]

---

## Hidden Risks Identified

### [Hidden Risk #1]
- **Location**: [where in the contract]
- **Mechanism**: [how the hidden risk works]
- **Impact**: [what could happen]
- **Recommendation**: [what to do about it]

---

## Top 5 Priorities: Fix These First

1. **[Most critical issue]** - [1 sentence why] - Section [X.X]
2. **[Second most critical]** - [1 sentence why] - Section [X.X]
3. **[Third]** - [1 sentence why] - Section [X.X]
4. **[Fourth]** - [1 sentence why] - Section [X.X]
5. **[Fifth]** - [1 sentence why] - Section [X.X]

---

## Risk Distribution Summary

- HIGH RISK clauses: [count]
- MEDIUM RISK clauses: [count]
- LOW RISK clauses: [count]
- Clean clauses: [count]

Important Guidelines

• Be specific, not generic. Do not say "this could be problematic." Say exactly what could go wrong and how much it could cost.
• Every alternative clause you write must be legally coherent and balanced for both parties.
• If a clause is actually fine, say so. Do not inflate risks to seem thorough.
• Always consider the contract from the perspective of the party who would be reviewing it (typically the party who did NOT draft it).
• If the contract type is identifiable, benchmark its terms against industry standards for that type.