Contract Risk Analysis System
Contracts hold information that is key to the operation of the business. They represent the legal benefits and obligations on the business at a point in time. From a Due Diligence and Compliance perspective, the business needs to be able to easily and quickly determine the size and scope of those benefits and obligations. This means being able to determine:
- Start Date, End Date and Renewal Dates
- The Parties to the agreement
- Key Terms such as interest rates, price increases and fee rates
- The contractual obligations (confidentiality, intellectual property etc)
Imagine you have been asked to review a specific contract to determine whether there are any risks that need to be understood. This might be prior to be being signed or as a consequence of some market event.
Firstly, you need to find the document, which, depending on the completeness of the filing system, may be the first challenge.
Secondly, you need to review the contract to extract the relevant data. If this is a one-off exercise, you might make only minimal notes about the contract. If you suspect there may be more questions in future, you might consider making more comprehensive notes about the entire contract.
Thirdly, you need to determine whether any of the clauses indicates a risk.
Now imagine you have been tasked with doing this across all the contracts in the organisation. Or you are tasked with identifying any contracts containing a specific type of clause. This is orders of magnitude more complicated, even if all the contracts are already easily accessible.
How can Symilarity help?
Symilarity’s Intelligent Contract Risk Analysis System replicates what you do manually but at scale. It is delivered using API (Application Programming Interface) technology that enables it to be integrated into your other business processes, if required.
Parse & Label
The system breaks the contract down into clauses and subclauses and determines its meaning based upon its AI/Machine Learning Model.
It extracts key information about the contract, such as start/end dates and details of the parties.
The labelled sections and extracted data are returned in a standard format easily consumed by another automated process.
Symilarity provides a secondary step that can be used in conjunction with the Parse and Label process. This enables a commentary to be added to the output based upon the labelled text.
The original document with textual commentary are provided as an easily consumed PDF document with colour coding to highlight risks.
The contract, with the labelled and extracted text are held in a centralised repository within Symilarity’s Insight Engine. This makes it easy to find in future. Also, the Insight Engine provides powerful search tools that enables all contracts (and the labelled text) to be searched quickly and easily.
Output from Stage 2 of the Contract Risk Assessment System