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Tour ZBrain to see how it enhances legal practice, from document management to complex workflow automation. ZBrain solutions, such as legal AI agents, boost productivity.
About the Agent
The Contract Clause Extraction Agent automates identifying and extracting key contract clauses from legal contracts. Its automated extraction and mapping of contracts using an advanced knowledge base ensures precise and efficient contract analysis, enhancing legal compliance and operational efficiency.
Challenges the Contract Clause Extraction Agent Addresses
Manually reviewing contracts is both time-consuming and prone to errors. Legal professionals often sift through complex documents to find essential clauses such as renewal terms, governing laws, and confidentiality agreements, which can lead to delays and inaccuracies. Inconsistencies in language and format across different contracts further complicate the review process, impacting compliance and decisions.
The Contract Clause Extraction Agent automates detecting and extracting key clauses from contracts. It scans legal documents to identify and categorize clauses into predefined categories using a configured knowledge base. This automation ensures precise and efficient contract analysis, reducing human error and speeding up the time-sensitive review process for high volumes of contracts.
How the Agent Works
The contract clause extraction agent automates the identification and extraction of clauses from legal contracts. Upon receiving a contract, the agent initiates a series of predefined steps to efficiently process and extract relevant clause information. Powered by a Large Language Model (LLM), it analyzes the contract's content to accurately interpret and extract key clauses with high precision. The agent ensures a thorough contract review, highlighting both the identified clauses and any missing ones. Below is a detailed breakdown of the agent's workflow at each stage of the clause extraction process:
Step 1: Clause Identification and Extraction
In this step, the agent analyzes the newly added contract to detect and retrieve relevant clauses by comparing the contract's content with the predefined categories outlined in the knowledge base.
Key Tasks:
- Category Matching: The agent evaluates each category in the knowledge base against the contract's content, using category-specific questions to identify matching clauses, ensuring all relevant clauses are captured.
- Clause Extraction: When a match is found, the agent extracts the relevant clause content from the contract.
- Clause Status: If the clause is present, it is marked as "Present"; if not, it is marked as "Not Present" for a comprehensive overview of the contract’s contents.
Outcome: A clear identification and extraction of clauses, showing which are present or absent for each of the 41 categories.
Step 2: Report Generation
Once the relevant clauses are extracted, the agent creates a structured, easy-to-read report that organizes the extracted information, providing a comprehensive presentation of the contract’s details.
Key Tasks:
- Data Input: The extracted clause information for all categories is passed to the LLM.
- Report Structuring: The LLM organizes the extracted data into a structured tabular format, detailing the clauses found for each of the 41 categories and displaying the relevant clause content under each category.
Outcome: A detailed report is generated, summarizing clause presence and providing a clear overview of the contract.
Step 3: Continuous Improvement with Human Feedback
The agent continuously improves its clause extraction capabilities through user feedback. Human feedback is collected on the accuracy of clause identification, the relevancy of extracted content, and the usefulness of the generated report.
Key Tasks:
- Feedback Collection: Users review the extracted clauses and provide feedback on the accuracy, relevance, and completeness of the extraction. Feedback may include notes on missing clauses, misinterpreted language, or incorrect classifications.
- Error Correction: The system automatically learns from its mistakes and adjusts its rule set accordingly, minimizing future errors in clause extraction.
Outcome: The agent continually improves through user feedback, enhancing its ability to handle more complex clauses, interpret varied legal terminology, and increase its overall efficiency in contract clause extraction.
Why Use the Contract Clause Extraction Agent?
- Time Savings: The agent accelerates the contract review process by automating clause identification, significantly reducing the time spent on manual analysis.
- Accuracy: Uses ZBrain’s capabilities to read and interpret documents in various formats.
- Consistency: The agent’s standardized approach ensures that each contract is reviewed thoroughly with consistent output across similar documents.
- Scalable: With the capacity to analyze numerous contracts efficiently, the agent supports scalability, accommodating organizations that handle high contract volumes.
- Enhanced Compliance: Quick access to specific clauses aids in ensuring compliance, supporting legal teams and decision-makers in making informed and timely responses to contractual obligations.
Input Data Set
Sample of data set required for Contract Clause Extraction Agent:
Service Agreement between Innivotech and YTM Systems
This Partnership Agreement is made and entered into as of September 1, 2024, by and between:
- Innivotech, a corporation organized under the laws of California, with its principal office located at 201 Market Street, San Francisco, CA 94103, hereinafter referred to as "Innivotech,"
- YTM Systems, a corporation organized under the laws of New York, with its principal office located at 413 Madison Avenue, New York, NY 10022, hereinafter referred to as "YTM Systems."
WHEREAS Innivotech specializes in software development and related services, and YTM Systems requires the services of Innivotech for a project involving the creation, deployment, and maintenance of custom software applications for internal use.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereby agree as follows:
Article 1: Effective Date and Term
This Agreement shall commence on September 1, 2024, and shall continue for a period of two (2) years, unless terminated earlier in accordance with the terms set forth in this Agreement.
Article 2: Scope of Services
Innivotech agrees to provide the following services to YTM Systems:
- a) Development of customized software solutions tailored to YTM Systems’s internal processes.
- b) Ongoing software maintenance and technical support for the duration of the Agreement.
- c) Quarterly updates and patches to ensure the software remains compatible with evolving business needs.
YTM Systems agrees to provide all necessary resources, access, and information required by Innivotech to perform the services as outlined above.
Article 3: Payment Terms
YTM Systems shall pay Innivotech an annual fee of $500,000, to be paid in four equal installments of $125,000 each, at the beginning of each quarter. The first installment is due within thirty (30) days of the commencement of this Agreement, specifically by September 30, 2024.
In the event of late payment, YTM Systems agrees to pay interest on any overdue amounts at a rate of 1.5% per month.
Article 4: Confidentiality and Data Protection
Both parties acknowledge that, during the term of this Agreement, they may have access to confidential and proprietary information of the other party, including, but not limited to, business plans, strategies, trade secrets, and financial data. Both parties agree to keep such information confidential and not disclose it to any third party without prior written consent from the disclosing party.
The service provider must comply with applicable data protection laws, including but not limited to the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). All data shall be encrypted at rest and in transit, and the provider must implement necessary technical and organizational measures to ensure the security and integrity of company data.
Article 5: Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any disputes arising under this Agreement shall be resolved exclusively in the courts located within the State of California.
Article 6: Termination
Either party may terminate this Agreement with sixty (60) days' written notice to the other party. In the event of termination, Innivotech shall be entitled to receive payment for all services rendered up to the effective date of termination.
Upon termination, Innivotech must return all of YTM Systems’s data in a usable, machine-readable format within 30 days. All residual copies of the data must be securely deleted within 60 days of the termination unless otherwise required by law.
Article 7: Intellectual Property Rights
Innivotech retains ownership of all intellectual property rights related to the software developed under this Agreement. YTM Systems is granted a non-exclusive, perpetual license to use the software for its internal business operations.
Article 8: Service Level Agreement and Performance Metrics
The service provider guarantees an uptime of no less than 99.9% for the services provided, excluding scheduled maintenance periods for which the company shall be notified at least 48 hours in advance. The provider shall offer remedies such as service credits or refunds if service availability falls below this threshold.
The service provider shall maintain agreed-upon performance metrics as outlined in the contract, including response times, resolution times for technical issues, and disaster recovery protocols. Failure to meet performance standards shall result in the application of penalties, service credits, or other remedies.
Article 9: Compliance with Local Laws
The provider agrees to comply with all applicable laws, rules, and regulations of the country in which the company is located. This includes, but is not limited to, labor laws, tax laws, environmental regulations, and data protection laws.
Article 10: Export Compliance
The provider agrees to comply with all import and export control laws and regulations of the country in which the company is headquartered. This includes obtaining all necessary licenses, permits, and approvals for the shipment of software or technology and ensuring that no goods or services are provided in violation of local export controls.
Article 11: Environmental and Health Regulations
The provider shall comply with all local environmental regulations, including waste management, emissions standards, and resource conservation laws. The provider agrees to adopt environmentally sustainable practices in accordance with the company’s environmental policy and local legal requirements.
Article 12: Entire Agreement
This Agreement constitutes the entire agreement between the parties and supersedes any prior agreements or understandings, whether written or oral.
Authorized Signatures:
Innivotech: Henrich Davis, Chief Executive Officer
Signature: ___
Date: September 1, 2024
YTM Systems: Rebecca Olsen, Chief Operating Officer
Signature: ___
Date: September 1, 2024
Deliverable Example
Sample output delivered by the Contract Clause Extraction Agent:
| Clause Title | Clause Reference from Contract |
|---|---|
| Parties | Innivotech: Henrich Davis, Chief Executive Officer; YTM Systems: Rebecca Olsen, Chief Operating Officer |
| Volume Restriction | Not Present |
| Audit Rights | Not Present |
| Most Favored Nation | Not Present |
| Insurance | Not Present |
| Exclusivity | Not Present |
| Non-Disparagement | Not Present |
| Covenant Not to Sue | Not Present |
| License Grant | Not Present |
| Termination for Convenience | "Either party may terminate this Agreement with sixty (60) days' written notice to the other party." |
| Non-Compete | Not Present |
| Rofr/Rofo/Rofn | Not Present |
| Unlimited/All-You-Can-Eat-License | Not Present |
| Price Restrictions | Not Present |
| No-Solicit of Employees | Not Present |
| Cap on Liability | Not Present |
| Source Code Escrow | Not Present |
| No-Solicit of Customers | Not Present |
| Revenue/Profit Sharing | Not Present |
| Uncapped Liability | Not Present |
| Irrevocable or Perpetual License | YTM Systems is granted a non-exclusive, perpetual license to use the software for its internal business operations. |
| Document Name | Not Present |
| Effective Date | This Agreement shall commence on September 1, 2024, and shall continue for a period of two (2) years, unless terminated earlier in accordance with the terms set forth in this Agreement. |
| Change of Control | Not Present |
| Third Party Beneficiary | Not Present |
| Joint IP Ownership | Not Present |
| Non-Transferable License | Not Present |
| Agreement Date | This Partnership Agreement is made and entered into as of September 1, 2024, by and between: |
| Governing Law | This Agreement shall be governed by and construed in accordance with the laws of the State of California. |
| Competitive Restriction Exception | Not Present |
| IP Ownership Assignment | Not Present |
| Liquidated Damages | Not Present |
| Anti-Assignment | Not Present |
| Warranty Duration | Not Present |
| Expiration Date | The contract's initial term will expire on September 1, 2026. |
| Affiliate License-Licensor | Not Present |
| Minimum Commitment | Not Present |
| Affiliate License-Licensee | Not Present |
| Post-Termination Services | Upon termination, Innivotech must return all of YTM Systems’s data in a usable, machine-readable format within 30 days. All residual copies of the data must be securely deleted within 60 days of the termination unless otherwise required by law. |
| Renewal Term | Not Present |
| Notice Period to Terminate Renewal | Not Present |
Contract Data Population Agent
Populates contract templates with client and project-specific details for draft generation.
Contract Compliance Check Agent
Validates populated contracts against compliance standards, ensuring no critical terms were altered in the data population process.
Contract Review Summary Agent
Generates a concise review summary of populated contracts, highlighting key points, obligations, and potential issues.
Regulatory Gap Analysis Agent
Analyzes current regulations against company policies to identify gaps and suggests improvements for compliance.
Template Language Generation Agent
Generates standardized language and clauses for contract templates based on contract’s type, jurisdiction, and compliance standards.
Policy Change Alert Agent
Notifies relevant teams of updates in regulatory policies, ensuring prompt action and compliance alignment.
