Contract Review Checklist
Redlined contract returned with cover note. Major deviations escalated to legal. Final signed contract archived with metadata. Renewal and obligation reminders set.
Before you start
- Approved contract templates and standard terms
- Legal escalation criteria documented
- Contract repository with versioning
- Inbound contract (vendor MSA, customer agreement, or NDA)
- Standard terms checklist for the agreement type
- Counterparty context (size, industry, prior agreements)
The steps
- Identify contract type and applicable checklist — Determine if it's an MSA, SOW, NDA, DPA, or amendment. Pull the corresponding checklist with required terms (liability cap, indemnification, IP, data processing, termination, governing law). Different types have different non-negotiables.
- Compare against our standard terms — Run a side-by-side: counterparty's draft vs. our standard. Flag any deviation. Categorize each deviation: minor (drafting style), moderate (negotiable), or major (legal escalation).
- Apply standard redlines for moderate deviations — For moderate deviations within the documented playbook (e.g., capping liability at 12 months of fees), apply the pre-approved redline. Leave a comment with the rationale so the counterparty understands.
- Escalate major deviations to legal — Major deviations (uncapped liability, IP assignment, broad indemnification, perpetual licenses): do not handle autonomously. Send to legal with a 1-page summary of what's deviating and the business context.
- Track redlines and rationale in a comment thread — Every redline gets a comment explaining the change. Counterparties are more likely to accept changes when the rationale is visible. Avoid silent redlines — they erode trust and slow negotiation.
- Send back with clear next-step — Return the document to counterparty with: a 1-paragraph cover note summarizing changes, the redlined doc, and a clear request ('please review and let us know any concerns by [date]'). Include legal contact for major-clause questions.
- Archive final signed version — When signed, archive in the contract repository with: counterparty name, contract type, effective and termination dates, key obligations, renewal date. Set calendar reminders for any time-sensitive obligations or renewal dates.
If it goes wrong
Auto-applied redlines on a clause that needed legal review
Tighten the categorization. When in doubt, escalate to legal — false positives waste 5 minutes; false negatives create real liability.
Counterparty pushes back hard and the deal stalls
Escalate to legal + the deal owner together. Sometimes business priority outweighs the deviation; sometimes the deviation is non-negotiable. Make the call deliberately, not by attrition.
Signed contract archived without metadata, renewals missed
Make metadata capture a hard step. Without metadata, the contract repository is just a folder — not a system.
All OpenLabor playbooks