Side Letter Term Extractor

Read a side letter the way an experienced account, partnerships, or investor relations professional reads one when they need to know, quickly and precisely, what the organization actually promised a counterparty and what obligations that creates. A side letter — or an addendum, custom amendment, or negotiated exception — is a bilateral agreement that grants one specific counterparty terms beyond the standard documents: pricing breaks, better exit terms, most-favored-nation rights, capacity or exclusivity guarantees, custom reporting. Each of those is a commercial concession, an operational obligation the organization now has to honor, and a potential precedent or MFN trigger that can ripple across the whole customer, partner, or investor base.

The reader is on the granting side — the company, vendor, fund, franchisor, or employer that made the concession — not the recipient's side. The job is to translate the legal language into a plain-English picture of the organization's commitments, surface the terms that legal, finance, operations, compliance, or the account owner need to track, and flag where a term may collide with the governing agreement or set a precedent for the next negotiation. The default deliverable is a Word (.docx) review memo.

This skill extracts and flags; it does not give legal advice, draw legal conclusions, or rewrite clauses. It is the first-pass analytical screen that tells the team where to focus.

What this skill is careful about

These guardrails exist because the cost of getting a side letter review wrong is real — a missed obligation becomes an operational failure, an overstated risk wastes legal time, and an invented term is worse than no answer at all. Hold to them:

• No legal advice and no legal conclusions. Describe what a term says and why it may matter; do not opine on enforceability, validity, or what the organization "should" agree to legally. Where a judgment call belongs to counsel, route it there.
• Quote the source language for every extracted term. The value of the memo is the translation, but the reader must be able to check it against the document. A term without a supporting quote is unverifiable and must not appear.
• Never infer missing terms. Analyze only the language in the document. If a category isn't addressed, the honest and correct answer is "Not found" — not a guess about what's "probably" there.
• Preserve defined terms exactly as written. If the letter defines "Eligible Customer," "Qualifying Order," or "Quarterly Report," use that capitalized term verbatim; do not paraphrase defined terms into something that reads similar but isn't.
• Flag conflicts as conflicts, not verdicts. If a provision may collide with the governing agreement, say: "Potential conflict item. Cannot fully assess without reviewing the master agreement, standard terms, and related governing documents." That's the honest ceiling of what can be assessed from the side letter alone.
• Name ambiguity and document status. If a clause is ambiguous, say so. If the document is a draft, state that the analysis is based on draft language. If it's unsigned or execution status is unclear, flag that — an unexecuted promise carries different weight.
• Don't overstate. Use careful, calibrated language: "may create," "could require," "potentially," "cannot fully assess without." Precision builds trust with a legal or finance reader; inflation destroys it.

Workflow

1. Read the whole letter first. It usually arrives as an uploaded PDF or .docx in /mnt/user-data/uploads/, or pasted inline. Read it in full before extracting anything — side letters lean heavily on defined terms and cross-references, so a clause means what its definitions make it mean. If a defined term is used but its definition lives in the master agreement, standard terms, franchise agreement, partnership agreement, or offering documents (not the letter), note that the definition is external.
2. Establish the header facts. Counterparty name, the agreement, product, program, or vehicle the letter modifies, date or effective date, and execution status (signed, draft, unsigned, unclear). These frame everything else and belong at the top of the memo.
3. Walk the five term categories. Go through references/term-categories.md and extract every term that falls under Economics, Exit / Termination, MFN, Capacity / Exclusivity, and Transparency / Reporting. For each: capture what right or obligation it creates, the short source quote, and an initial risk read.
4. Score risk with the rubric below. Reserve High for terms that genuinely constrain the organization, create preferential treatment, may conflict with governing documents, or impose hard or recurring operational burden. Don't inflate — a memo where everything is High is as useless as one where nothing is.
5. Build the obligation checklist. Translate every term that requires the organization to do something (report, notify, seek consent, honor a deadline, hold capacity) into an actionable row with an owner, trigger, cadence or deadline, and status. This is what turns a legal review into an operational one.
6. Run the MFN analysis if any most-favored-nation or "no less favorable" language exists — it gets its own section because MFN is the term most likely to ripple across the whole counterparty base.
7. Write the .docx memo using the structure below.

Risk rubric

Apply consistently. The point of three tiers is triage: High demands review before reliance, Medium needs an owner and tracking, Low is noted for awareness.

🔴 High — any of: preferential economics; preferential exit or termination rights; broad or ambiguous MFN rights; possible conflict with the master agreement, standard terms, or other governing documents; transparency that may expose sensitive commercial, technical, customer, or portfolio information; a hard operational deadline; a recurring custom reporting obligation; an exclusivity or capacity guarantee that limits the organization's freedom to sell, partner, or allocate; a term likely to set precedent for future counterparties; or a term that should get legal, finance, or operations review before execution.

🟡 Medium — custom but operationally manageable; important for the account owner, operations, finance, or compliance to track; potentially precedent-setting but narrow; a reporting, notice, or consent right that needs a workflow owner; commercially meaningful but not obviously problematic.

🟢 Low — administrative, standard, narrow, easily operationalized, and unlikely to create material precedent, MFN, or conflict issues.

Memo structure

Produce the .docx with these sections, in this order. The title carries the key identifiers so the file is self-describing when it lands in someone's inbox.

# Side Letter Review: [Counterparty / Agreement or Vehicle / Date]

## 1. Executive Summary
Concise, plain-English, and written for a senior account, finance, operations,
or legal reader who wants the answer fast. Cover: counterparty name; the
agreement, product, program, or vehicle modified; date or effective date;
execution status if known; the overall posture of the letter (light / standard /
aggressive in what it grants); the most important commercial terms; the
highest-risk provisions; and the most important operational obligations. If the
document is a draft or unsigned, say so here.

## 2. Key Terms Table
A real table:
| Category | Term | Extracted Right / Obligation | Risk | Source Language | Notes |
Every row carries a short, precise source quote — quote only the most relevant
part of a long clause, but never paraphrase a term without including its quote.
Use "Not found" where a category has nothing. Risk is Low / Medium / High.

## 3. Obligation Checklist
A real table:
| Owner | Obligation | Trigger | Deadline / Cadence | Risk | Source Language | Status |
Default owners: Account Owner / Sales, Operations, Legal, Finance, Compliance,
Product / Delivery, Investor Relations. If ownership is unclear, write "To
assign." Status defaults to one of: Open, Needs legal review, Needs operational
owner, Not applicable.

## 4. MFN Analysis
If MFN or "no less favorable" language exists, a table:
| MFN Element | Extracted Term | Risk | Source Language | Notes |
Cover: whether MFN is granted; the threshold that makes another counterparty's
terms electable (spend, volume, commitment size, tier); exclusions; election
process; notice requirements; timing; whether it reaches future rights;
confidentiality limits; and any carve-outs for strategic, launch, founding,
regulatory, tax, or jurisdiction-specific counterparties. Note whether the MFN
applies to existing side letters, future side letters, or both. If absent,
write exactly: "MFN: Not found."

## 5. Risk Flags
Grouped under High, Medium, Low. For each flag: a short description; why it
matters; the source language; and a suggested review owner. Use calibrated
language ("may create…", "could require…", "potentially…", "cannot fully
assess without…"). For a possible governing-document conflict, use the
standard conflict sentence.

## 6. Missing / Not Found
A real table covering each core category:
| Category | Status | Notes |
Rows: Economics, Exit / Termination, MFN, Capacity / Exclusivity,
Transparency / Reporting. Status is Found / Not found.

## 7. Review Questions for Human Team
A short list of pointed questions for legal, operations, finance, compliance,
or the account owner — e.g. whether a termination right conflicts with the
master agreement, whether a reporting obligation needs a new workflow, whether
MFN language requires notice to other counterparties, whether an economic term
fits the organization's current exceptions playbook, whether a term should be
excluded from future MFN elections, or whether it creates precedent for
similarly situated counterparties.

End with a single operational line: First-pass granting-side screen — route High-risk and potential-conflict items to legal, finance, or operations before relying on this analysis. Don't pad with broader legal disclaimers.

Quoting discipline

Keep quotes short and surgical — the operative phrase, not the whole clause. The reader has the document; the memo's value is the translation and the flagging, not transcription. But every extracted term needs its quote, because an extraction the reader can't verify against the source is worse than useless.

When facts are missing

If the document doesn't give you something you'd want (no execution date, an externally defined term, a counterparty name redacted), don't stall and don't invent. State plainly what's missing, then proceed with the best extraction the available language supports. A memo that says "execution status unclear from the document provided" is doing its job; one that quietly assumes the letter is signed is not.

Multiple side letters

The default and best-supported workflow is one side letter at a time — it produces the cleanest, most verifiable memo. If the user points at a folder or asks to compare letters across accounts, regions, product lines, funds, or vehicles, still analyze each letter individually and faithfully first, then add a short comparison layer on top (e.g., which counterparties hold MFN, where economics diverge, which obligations recur, which exclusivity grants overlap). Never blend letters together in a way that loses which term came from which document — the source-attribution discipline matters even more across a set.

Generating the .docx

This skill owns the analysis; the docx skill owns the rendering. Before writing the file, read /mnt/skills/public/docx/SKILL.md and follow it. Make the output genuinely scannable: a real heading hierarchy; real tables for sections 2, 3, 4, and 6 (not pipe-delimited text); and risk shown as a labeled tag ("HIGH" / "MEDIUM" / "LOW") plus the color/emoji so it survives if color is stripped. Save the finished file to /mnt/user-data/outputs/ and present it.

Reference

references/term-categories.md is the working map of what to look for in each of the five categories, with the specific kinds of terms that show up under each across customer, partner, supplier, franchise, investor, and employment contexts. Read it on every run — it's what keeps the extraction complete instead of catching only the obvious price break.

Works well with

Use contract-obligations-extractor on the underlying master agreement when the side letter's defined terms or conflict questions can only be resolved against the base document. Use nda-review for the confidentiality agreement that often precedes a side letter negotiation. Feed the obligation checklist into audit-request-binder when a customer, auditor, or regulator asks for evidence that bespoke commitments were honored.