Contract Obligations Extractor

Turn a 200-page commercial agreement into an obligations abstract a contract manager can work from: every performance threshold with its definition and ramps or step-downs, every restriction with its carve-outs and their size and conditions, the key defined terms with each adjustment itemized, and a flag on every provision that is looser or more one-sided than market. Every extracted term carries a page or section citation, so the output is checkable rather than trustable.

Why this skill exists

The terms that hurt a party show up years later, and they are almost never in the section with the obvious heading. They are in the defined terms: a "Net Revenue" definition whose uncapped deductions make a royalty meaningless, an "Affiliate" definition that lets the counterparty assign the contract to an entity you never diligenced, an "Uptime" definition that excludes so many maintenance windows the service credit never triggers, a liability cap that scales off the same fees the vendor controls. Reading for those requires chasing cross-references through a document written to make them hard to find, and it takes days. This does the extraction pass systematically so the human spends their time on the three provisions that actually matter, and so the abstract the operating team relies on for the life of the agreement is built from the document rather than from someone's recollection of the negotiation.

Inputs

Required:

• The agreement (uploaded file or pasted text). Amendments, order forms, statements of work, schedules, and any side agreements should be included if they exist — the schedules are frequently where the real numbers live.

Optional but high-value:

• Agreement type and market context: enterprise SaaS, commercial office lease, single-unit franchise, exclusive distribution, patent license, middle-market loan — this determines what "market" means for the off-market flags
• Which side the user is on (customer or vendor, licensor or licensee, landlord or tenant, franchisor or franchisee, lender or borrower) — every "one-sided" judgment depends on it
• Current performance data (actual spend, actual uptime, actual sales, current financials) to compute the compliance position against the thresholds
• Your organization's house positions, playbook, or prior precedent documents with the same counterparty
• Which specific provisions the user already cares about

Missing-input behavior: Without a document there is nothing to extract — ask once. If agreement type or the user's side is not stated, infer it from the document's own features (which party has the performance obligations, who pays whom, the structure of the remedies) and state the inference explicitly at the top of the output, since every off-market judgment depends on it. If the document is clearly partial — exhibits or schedules missing, defined terms referenced but not included — say which sections are absent and mark the affected extractions incomplete rather than guessing.

How it works

1. Identify the document and the parties. Contracting entities (and whether affiliates are bound), effective date, term and renewal structure, the commercial scope (what is being provided, licensed, leased, or lent, and for how much), pricing or rent schedule, and whether this is amended-and-restated (if so, note which amendment you are reading and what the original said where it matters).
2. Chase the defined terms first. Before extracting any obligation, pull the definitions it depends on: the revenue, sales, fees, or rent base that payments are computed on; "Affiliate"; "Change of Control"; "Confidential Information"; "Deliverables" or "Work Product"; "Territory" and "Field"; "Uptime," "Availability," or "Downtime"; "Operating Expenses" or pass-through costs; "Net Revenue" and its deductions; and in financing documents, the earnings measure and debt measure the tests are written on. An obligation is only as strong as the terms it is written in.
3. Extract performance thresholds and obligations. For each: the metric, its full formula, measurement frequency, first measurement date, ramp or step-down schedule with dates, cure rights (how many, how often, mechanics, whether a cure resets the count), and the consequence of a miss (service credits, price adjustment, loss of exclusivity, termination right, default). Examples across agreement types: service levels and response times; minimum purchase, spend, or sales commitments; minimum royalties; staffing or delivery milestones; sales quotas tied to territory rights; opening or development schedules in a franchise; financial ratio tests in a loan.
4. Itemize the key defined terms in full. For each definition that drives money or rights, list every component separately — every deduction from "Net Revenue," every exclusion from "Downtime," every add-back or adjustment to an earnings measure, every cost category inside "Operating Expenses" — with: whether it is capped (and the cap's basis — a percentage, a dollar amount, or uncapped), whether "run-rate," "annualized," "anticipated," or "projected" language appears, and whether the adjustments are subject to a single overall cap. This section is usually the single most important output.
5. Extract restrictions and size every carve-out. Exclusivity and non-compete (scope, territory, duration, and permitted exceptions); non-solicitation; assignment and subcontracting restrictions and their permitted cases; use and field-of-use restrictions; restrictions on price changes, on adding or removing products, on sublicensing or subleasing; audit rights; and permitted-exception "baskets" — a dollar or percentage amount of activity that is allowed notwithstanding the restriction. For each carve-out, give the fixed amount, the scaling component if any (usually a percentage of fees, sales, or square footage), and the conditions to use it. Most-favored-customer or pricing-protection clauses go here, with scope and any sunset.
6. Extract termination, renewal, change-of-control, and exit terms. Termination for convenience (who, on what notice, with what fee), termination for cause and the cure periods on each side, auto-renewal mechanics and the notice window to opt out, early-termination or liquidated-damages provisions, change-of-control triggers (definition, which party is bound, whether consent is required, and whether the deal is portable), transition assistance and data return on exit, survival clauses, and in financing documents, mandatory prepayment triggers and call protection.
7. Run the off-market flag pass using the checklist below, judged against the stated or inferred agreement type and the user's side.
8. Compute the compliance position where the inputs allow it, labeling every derived figure and showing the arithmetic. If current performance data was not provided, say so rather than estimating.
9. Write the one-page key terms abstract the operating team will use going forward.

Output format

# [Counterparty] — [Agreement Type] Abstract
Document: [title, date, amendment no.] | Scope: [what is provided, size, term]
Agreement type assumed: [SaaS / lease / franchise / license / supply / financing] — [stated by user / inferred from X]
User's side: [customer / vendor / etc.] — [stated / inferred]
Sections not provided: [list, or "none"]

## Headline read (one paragraph)
How much real protection does this document give the user's side, how much
is it obligated to, and the 2–3 provisions that drive that answer.

## Performance Thresholds & Obligations
| Obligation | Metric / formula | Frequency | Opening level | Ramps / step-downs | First test | Consequence of miss | § |
|---|---|---|---|---|---|---|---|
Cure rights: [count / frequency / mechanics] [§]
Springing or conditional obligations: [trigger] [§]

## Key Defined Terms — Adjustment Inventory
| # | Defined term | Component (deduction / exclusion / add-back) | Capped? | Cap basis | Look-forward or "projected" language | § |
|---|---|---|---|---|---|---|
Overall cap on adjustments: [yes/no, size] [§]
Assessment: [how much the headline figure could plausibly move, and on what]

## Restrictions & Carve-Out Capacity
| Restriction | Scope | Fixed carve-out | Scaling carve-out | Conditions to use | § |
|---|---|---|---|---|---|
Exclusivity / non-compete | | | | |
Non-solicitation | | | | |
Assignment / subcontracting | | | | |
Use / field / territory | | | | |
Pricing changes | | | | |
Audit rights | | | | |
Most-favored-customer / pricing protection: [scope, sunset] [§]

## Termination, Renewal, Change of Control & Exit
Termination for convenience: [who, notice, fee] [§]
Termination for cause and cure periods: [each side] [§]
Auto-renewal and opt-out window: [§]
Early termination / liquidated damages: [§]
Change of control: [definition, which party bound, consent, portability] [§]
Transition assistance / data return / survival: [§]

## Off-Market / One-Sided Flags
Ranked. Each: the provision, quoted or cited [§], the standard formulation it
departs from, and one sentence on the exposure it creates for the user's side.

## Compliance Position (only if performance data provided)
| Test | Contract level | Current | Margin | Change needed to breach |
|---|---|---|---|---|
[All figures derived — inputs shown]

## One-Page Key Terms Abstract
[The standing reference for the operating team: parties, scope, pricing,
term and renewal dates, obligations and levels, reporting and notice
deadlines, key carve-outs, change of control, and the three provisions to watch.]

## Open questions for counsel / the counterparty
Numbered, ordered by how much they'd change the commercial view.

Off-market provision checklist

Apply as hypotheses to test against the stated agreement type and the user's side, not as automatic findings. Each is standard in some markets and aggressive in others.

• Uncapped "anticipated," "run-rate," or "projected" adjustments to a defined earnings, savings, or revenue measure, or a look-forward beyond the measurement period → a test or payment base can be satisfied with results that never arrive
• No overall cap on deductions or adjustments → the individual caps are decorative
• A payment base ("Net Revenue," "Gross Sales," "Net Receipts") with open-ended deductions — returns, allowances, "costs of collection," affiliate charges — → the royalty, commission, or revenue share shrinks at the payer's discretion
• A broad "Affiliate" definition combined with free assignment to affiliates → the contract can be moved to an entity with no assets or a different business
• Asymmetric liability caps or indemnities — one side capped at a small multiple of fees, the other uncapped; or indemnities that run only one direction
• Service credits as the sole and exclusive remedy combined with a narrow "Downtime" definition (long maintenance windows, exclusions for "third-party causes") → nominal protection only
• Most-favored-customer with a sunset or narrow scope (excludes renewals, bundles, or affiliates) → pricing protection expires
• Scaling carve-outs on the greater of a dollar amount and a percentage of fees, sales, or assets → permitted activity expands with the same figure the definitions inflate
• Exclusivity or non-compete without a reciprocal commitment (minimum purchase, minimum marketing spend, or performance floor on the other side) → one party is locked in, the other is free
• Termination for convenience for one side only, or long cure periods for their breaches and short ones for yours
• Auto-renewal with a long opt-out window (90+ days before expiry) and a price escalator on renewal
• Unilateral price increases not tied to a published index or capped per period
• Change of control that triggers only in one direction, or a portable deal that lets the counterparty be sold without your consent while your own sale requires theirs
• IP or data-rights overreach — assignment of the customer's data or improvements, or a license back that is narrower than what was granted
• Audit rights that are one-sided, unlimited in frequency, or at the audited party's cost regardless of findings
• Long reinvestment, cure, or grace periods on money owed to the user's side (12–18 months plus extension)
• Reporting: no periodic compliance statement, no detail requirements, or delivery deadlines so long the user learns of a breach a year late

Guardrails

• Every extracted term carries a section or page citation. No term without a locator. If the citation is uncertain because of PDF extraction quality, say so and flag it for manual verification.
• Quote defined-term language verbatim where the exact words matter — especially the payment base definition, the adjustment and deduction list, the "Affiliate" and "Change of Control" definitions, and any exclusive-remedy provision. No paraphrase inside quotation marks.
• Never reconstruct a provision from what is typical. If a section was not provided or is illegible, mark it "not provided" — an assumed obligation is worse than an acknowledged gap.
• Derived figures are labeled and shown. Compliance margin, implied ratios, and carve-out capacity in dollars are computed, not extracted; show the inputs and arithmetic every time.
• "Off-market" is a benchmark comparison, not a legal conclusion. State the standard formulation you are comparing against, and note that market conventions vary by industry, deal size, vintage, and the relative leverage of the parties.
• This is not legal advice and does not replace counsel's review, a formal contract analysis, or the agreement itself, which governs. Complex questions of enforceability, subordination, priority, jurisdiction, or regulatory compliance belong with a lawyer.
• Confidentiality: commercial agreements are confidential and often NDA-covered. This skill assumes an organization-approved AI environment. Do not reproduce large verbatim sections of the agreement in the output.

Quality checks

• Agreement type and the user's side stated or inferred, with the inference labeled
• Every obligation, carve-out, and definitional adjustment has a section citation
• Definitional adjustments itemized individually — not summarized as "customary deductions" or "standard exclusions"
• Cap status recorded for every adjustment, including "uncapped"
• Assignment, affiliate, and change-of-control provisions addressed explicitly, even if standard
• Every carve-out shows fixed amount and scaling component
• Off-market flags each name the standard formulation being compared against and the side exposed
• Derived figures labeled and arithmetic shown
• Missing sections listed rather than silently skipped
• The one-page abstract is usable standalone by someone who never sees the full output

Example prompts

"Attached is the master services agreement and three order forms from our proposed HR platform vendor — five-year term, about $2M total. Extract the full obligations package from the customer side. I mainly want to know how real the uptime commitment is and whether the auto-renewal and price escalator are as bad as they look."

"Here's the franchise agreement plus Amendment No. 2 for our second location. Build the key terms abstract for our operating file, and tell me what Amendment No. 2 actually changed about the development schedule and the marketing fund contribution."

"Commercial lease for our new warehouse, 84,000 square feet, ten-year term. Read the doc and flag anything off-market for an industrial lease of this size — especially the operating expense pass-throughs, the assignment restrictions, and what happens if we're acquired."

"Patent license from a university for our diagnostics product. Itemize the 'Net Sales' definition and every deduction, extract the minimum royalty ramp, and tell me whether the field-of-use restriction has room for the veterinary market."

"Middle-market credit agreement, $180M facility, sponsor-backed healthcare services. Extract the covenant package from the lender side — how much of the earnings definition is real, and can assets leave the credit group?"

Works well with

Run proposal-first-pass on the counterparty's proposal or pitch to compare the commercial narrative against what the document actually permits. Use red-team-premortem on the resulting commercial view once the abstract is built. When a periodic statement arrives under the agreement, payout-reconciliation-checker recomputes it against the terms extracted here.