Contract Review & Risk Flagging Agent

mkdir contract-review && cd contract-review
python3 -m venv venv
source venv/bin/activate
pip install anthropic pypdf python-dotenv

ANTHROPIC_API_KEY=sk-ant-...

import os
import sys
from pathlib import Path
from datetime import datetime
from dotenv import load_dotenv
import anthropic
from pypdf import PdfReader

load_dotenv()
claude = anthropic.Anthropic(api_key=os.getenv("ANTHROPIC_API_KEY"))

# ── Your standard positions (the "playbook") ──────────────────────────────────
# Edit this to match your company's standard contract positions.

PLAYBOOK = """
OUR STANDARD CONTRACT POSITIONS:

PAYMENT TERMS:
- Standard: Net 30 days from invoice
- Acceptable: Net 45 days
- Red flag: Net 60+ days, no late payment clause, payment milestones with unclear triggers

TERMINATION:
- We require: Either party can terminate for convenience with 30 days notice
- Acceptable: 60 days notice
- Red flag: Termination for convenience requires 90+ days notice, 
  or only "for cause" termination allowed

LIABILITY:
- Our cap: Limited to fees paid in the last 12 months
- Acceptable: 2x annual fees
- Red flag: Unlimited liability, no cap, or cap includes consequential damages
- We always exclude: Indirect, special, punitive, consequential damages

IP OWNERSHIP:
- We retain all IP we bring to the project
- Work-for-hire output: ownership negotiable, we prefer dual license
- Red flag: Assignment of all IP including background IP to the other party

CONFIDENTIALITY:
- Standard duration: 3 years post-termination
- Acceptable: 5 years
- Red flag: Perpetual confidentiality, no carve-outs for publicly available info

AUTO-RENEWAL:
- We prefer: No auto-renewal, or 30-day opt-out window
- Red flag: Auto-renewal with less than 30 days opt-out notice

GOVERNING LAW:
- Preferred: Laws of England and Wales
- Acceptable: Laws of any common-law jurisdiction
- Red flag: Exclusive jurisdiction in a foreign/unfamiliar court

EXCLUSIVITY:
- We do not accept exclusivity obligations
- We do not accept non-compete clauses broader than 6 months post-termination
"""

# ── PDF extraction ─────────────────────────────────────────────────────────────

def extract_pdf_text(pdf_path: str) -> str:
    """Extract all text from a PDF file."""
    reader = PdfReader(pdf_path)
    text   = ""
    for page in reader.pages:
        text += page.extract_text() + "\n"
    return text.strip()

# ── Contract review with Claude ───────────────────────────────────────────────

def review_contract(contract_text: str, filename: str) -> str:
    """Send the contract to Claude for review against the playbook."""

    prompt = f"""You are a senior commercial lawyer reviewing a contract on 
behalf of our company. Compare the contract against our standard positions 
(the "playbook") and produce a structured risk assessment.

OUR PLAYBOOK:
{PLAYBOOK}

CONTRACT TO REVIEW (filename: {filename}):
{contract_text}

Produce the following structured review:

## CONTRACT OVERVIEW
- Document type (NDA, MSA, SOW, etc.)
- Parties involved
- Effective date and duration
- Total contract value if stated

## KEY TERMS EXTRACTED
For each clause category below, state: what the contract says, whether it 
matches our playbook, and risk level (✅ OK | ⚠️ Review | 🔴 Red Flag):

1. Payment Terms
2. Termination Rights
3. Liability Cap
4. IP Ownership
5. Confidentiality
6. Auto-Renewal
7. Governing Law
8. Exclusivity / Non-compete
9. Any other unusual or noteworthy clauses

## RISK SUMMARY
List all flagged items in priority order:
| Risk | Clause | Current Language | Our Standard | Severity |
|------|--------|-----------------|--------------|----------|

## RECOMMENDED CHANGES
For each red flag, write the specific language change we should request:
"Change [current clause] to [our preferred language]."

## OVERALL RISK RATING
- Green (proceed): No material issues
- Amber (proceed with changes): Issues present but manageable with amendments  
- Red (legal review required): Significant risk requiring lawyer involvement

State your overall risk rating and a 2-sentence summary of the most 
important issues."""

    response = claude.messages.create(
        model="claude-3-5-sonnet-20241022",
        max_tokens=4000,
        messages=[{"role": "user", "content": prompt}]
    )
    return response.content[0].text

# ── Save output ───────────────────────────────────────────────────────────────

def save_review(review: str, original_filename: str):
    """Save the review to a text file."""
    timestamp  = datetime.now().strftime("%Y%m%d_%H%M%S")
    base_name  = Path(original_filename).stem
    output_file = f"review_{base_name}_{timestamp}.md"
    with open(output_file, 'w') as f:
        f.write(f"# Contract Review: {original_filename}\n")
        f.write(f"Reviewed: {datetime.now().strftime('%d %B %Y at %H:%M')}\n\n")
        f.write(review)
    return output_file

# ── Main ──────────────────────────────────────────────────────────────────────

def main():
    if len(sys.argv) < 2:
        print("Usage: python review_agent.py contract.pdf")
        print("       python review_agent.py *.pdf  (review multiple)")
        sys.exit(1)

    pdf_paths = sys.argv[1:]

    for pdf_path in pdf_paths:
        if not os.path.exists(pdf_path):
            print(f"File not found: {pdf_path}")
            continue

        print(f"\nReviewing: {pdf_path}")
        print("Extracting text from PDF...")
        contract_text = extract_pdf_text(pdf_path)
        word_count    = len(contract_text.split())
        print(f"Extracted {word_count} words")

        if word_count < 100:
            print("⚠️ Very short document — check that the PDF contains readable text (not scanned images)")

        print("Sending to Claude for review (this takes 15–30 seconds)...")
        review = review_contract(contract_text, pdf_path)

        # Display the review
        print("\n" + "="*60)
        print(review)
        print("="*60)

        # Save to file
        output_file = save_review(review, pdf_path)
        print(f"\n✓ Review saved to: {output_file}")

if __name__ == "__main__":
    main()

source venv/bin/activate

# Review a single contract
python review_agent.py vendor-nda.pdf

# Review multiple contracts at once
python review_agent.py contracts/vendor-nda.pdf contracts/msa-draft.pdf

## CONTRACT OVERVIEW
- Document type: Mutual Non-Disclosure Agreement
- Parties: Acme Corp ("Discloser") and Our Company ("Recipient")  
- Effective date: 1 March 2025
- Duration: 2 years

## KEY TERMS EXTRACTED

**1. Payment Terms**
N/A — NDA only. ✅ OK

**2. Termination Rights**
Either party may terminate with 30 days written notice. ✅ OK — matches our standard.

**3. Liability Cap**
Clause 8.3: "Liability shall not exceed £5,000 in aggregate."
⚠️ REVIEW — Cap of £5,000 is very low. Our standard is fees paid in last 12 months (if applicable) or at minimum a reasonable cap tied to the purpose of the agreement.

**4. Confidentiality Duration**
Clause 5: "Obligations survive for 7 years post-termination."
🔴 RED FLAG — 7 years exceeds our standard of 3–5 years. Recommend requesting 3 years.

**6. Auto-Renewal**
Clause 9: "Agreement automatically renews annually unless either party gives 90 days notice."
🔴 RED FLAG — 90-day opt-out window is excessive. Our standard is 30 days.

## OVERALL RISK RATING
**🟡 Amber — Proceed with changes**

Two clauses require amendment before signing: the 7-year confidentiality 
duration (request 3 years) and the 90-day auto-renewal opt-out window 
(request 30 days). The £5,000 liability cap should also be reviewed.