Making sense of contracts: How AI streamlines contract review
In today's fast-paced business world, contract review and analysis play a crucial role in ensuring the success and smooth functioning of organizations. However, the traditional manual approach to contract review can be time-consuming, error-prone, and costly.
A big company can just hire new lawyers and add them as new costs. But contracts are equally important for small and medium businesses and self-employed professionals, and making sense out of them can be rather challenging.
That's where the power of artificial intelligence comes in. By harnessing AI technology, businesses can streamline their contract review process, improve accuracy, and save valuable time and resources. Let’s take a look at how this technology can help businesses.
Understanding Contract Review
Contract review is a crucial step in contract management. It involves a detailed analysis of a contract to ensure its terms and conditions align with the client's interests. This process requires a keen eye for detail, a thorough understanding of the law, and a significant time investment.
Traditionally, contract review has been a manual process carried out by legal practitioners. This manual approach has been fraught with challenges such as inefficiency, inaccuracy, and high costs. With the volume of contracts that many businesses deal with, manual contract review becomes impractical and unsustainable.
What is AI Contract Review and Analysis
Artificial Intelligence has been making significant strides in various industries, and the legal sector is no exception. AI in legal processes is a contemporary development that's poised to transform the practice of law. This technology holds the promise of automating routine tasks, reducing human error, and enhancing efficiency.
In the legal industry, AI is being applied in diverse areas such as legal research, e-discovery, compliance checks, case prediction, and contract review, among others. Particularly, the use of AI contract review has attracted substantial attention due to its inherent potential to revolutionize contract management processes.
AI contract review and analysis involve the use of software that can read, understand, and extract relevant information from contracts. AI technology utilizes natural language processing (NLP) and machine learning (ML) algorithms to analyze contracts, identify key clauses, obligations, risks, and opportunities, and compare them with industry standards and best practices. Additionally, AI can generate summaries, reports, and insights from contracts and flag any issues or anomalies that require attention.
By training the software on a vast amount of contract data, it can recognize patterns, compare clauses with the outcomes of legal cases, and make accurate predictions. This technology ensures that no content is lost during contract creation and helps optimize terms, negotiations, and outcomes.
The application of AI in legal processes, particularly contract review, is a breakthrough that is set to redefine the workings of the legal sector. The technology is not intended to replace legal professionals, but to complement their efforts and enhance their efficiency. With AI, legal practitioners can now focus on strategic tasks, leaving the tedious and routine tasks to AI.
When it comes to SMEs, we believe that this technology has the potential to help entrepreneurs make sense of contracts without having to pay lawyers for a rather simple task.
The Benefits of AI Contract Review and Analysis
Implementing AI contract review and analysis can provide several advantages for businesses:
Time and Cost Savings
By automating the contract review process, AI significantly reduces the time and effort required for manual review. This frees up valuable resources, allowing entrepreneurs to focus on more strategic and high-value tasks. Moreover, AI can help avoid missed deadlines, penalties, and disputes, ultimately saving money.
Accuracy and Risk Mitigation
AI technology minimizes the risk of human errors and oversight in contract review. It can identify inconsistencies, gaps, and redundancies in contracts, ensuring compliance with standards, policies, and regulations. AI also helps in monitoring and managing contract obligations and performance, alerting users to any changes, risks, or opportunities that may impact contracts.
Enhanced Decision-Making and Value Creation
AI contract review and analysis provide valuable insights and analytics that can drive informed decision-making. By leveraging contract data and historical outcomes, AI can optimize terms, negotiations, and outcomes, creating more value for businesses. Moreover, AI can identify risks or areas of concern before signing contracts, enabling businesses to make better-informed decisions.
Meet AI Contract Review on Enty — Check the Quality of Your Contract For Free
With everything mentioned before, our team decided to add a new AI Contract Review tool to Enty’s Control Panel. The current version is just the first beta, but it can already do wonders for your contract routine. All you have to do is upload a document on Enty and get a full review done in a matter of 3 to 4 minutes.
Summary
First, the AI Contract Review provides you with an overall summary of the research. This summary includes a general opinion on the quality of the contract and a score from 1 to 10. The main goal of the summary is to provide you with insights on the contract's quality right away.
Contract Details
After that, the almighty AI gathers contract details in one place. Yeah, we know how hard it is to get this information by yourself. Here is the information provided in this section:
Type of contract
Jurisdiction
Parties involved
Subject (main terms, purposes, and conditions; monetary and date aspects)
Key Obligations
Termination
Signatories
Dates (specific dates and deadlines that are critical to the contract’s performance)
Confidentiality, Amendments and Modifications, Intellectual Property, Force Majeure, Linked agreements
"Need-to-Know"
The other section of the review is called “Need-to-Know”. It provides insight on what you should pay attention to in relation to this contract. Here is a list of some examples highlighted in this section:
Suspicious conditions
Clauses that might raise legal concerns
Poor formatting of the document
Inconsistencies compared to industry standards
Unclear or ambiguous language, and suggestions for alternative wording
Conflicting terms and clauses
Potential negotiation points
And more
Last but not least, our tool provides you with a list of improvements you should consider implementing in the contract.
That’s it! Handle the majority of contract-related issues without having to pay lawyers. Create contracts from scratch and review the contracts sent to you on Enty. All on a single platform. No legal skills required; we've got you covered!
