AI for summarising contracts you already signed and forgot

5 days ago
3 min read

Updated: 2 days ago

Introduction

Every established business is bound by agreements nobody has read since they were signed. Supplier contracts, leases, service agreements, software licences, finance arrangements, customer terms and framework agreements accumulate over years, each signed by whoever was responsible at the time, several of whom have left.

The consequence is not usually a dispute; it is a slow leak. Renewal windows missed and terms extended automatically, price increases permitted by a clause nobody knew about, obligations to maintain insurance at a level you no longer hold, and reporting requirements quietly unmet. Reading the whole file is a week of work, which is why it never happens, and it is exactly the sort of extraction task that is now cheap.

1. AI for summarising contracts you already signed produces an obligations register

That is the output to aim for.

Not summaries filed alongside the contracts, but one table: every commitment, every date, every value, and who owns it. This is the document that prevents breaches, and it is what the exercise exists to create.

2. Start with renewal and notice dates

The most immediately valuable extraction.

Every expiry, every automatic renewal, and the notice period and window for each. Diarised with a reminder before the window opens. This alone typically pays for the whole exercise within a year. Set the reminder a month before the window opens rather than on the day, so there is time to decide rather than only to act.

3. Find the price variation clauses

Where costs rise without a decision.

Annual indexation, permitted increases on notice, and charges that change with volume. Businesses discover these when the invoice arrives, and they are usually visible in an agreement signed years earlier.

4. List what you have promised to maintain

The obligations that lapse quietly.

Insurance at specified levels, accreditations, minimum volumes, service levels, reporting, and record keeping. Failing these is a breach even when nobody notices, and it becomes relevant precisely when something else goes wrong.

5. Check the termination rights on both sides

Frequently uneven.

How and when each party can exit, what notice applies, and what happens to prepayments and work in progress. Many agreements are considerably easier for the supplier to leave than for you.

6. Identify what depends on a single agreement

A concentration risk.

Where one contract underpins a large share of revenue, or a single supplier agreement is critical to delivery, that dependency should be a known and managed risk rather than a fact discovered during a renegotiation.

7. Verify the summary against the document

The essential check.

Extraction is reliable and not perfect, and a missed clause in an obligations register is worse than no register because it creates false confidence. Spot-check the significant contracts against the source.

8. Give every contract an internal owner

The organisational fix.

A named person responsible for its dates, its performance and its renewal. Contracts without owners are the ones that renew automatically for another three years.

9. Review the register quarterly

Where it becomes useful.

Upcoming dates, obligations due, and anything approaching a decision point. A register produced once and filed is an artefact; one reviewed quarterly changes what the business does.

Be careful about confidentiality when processing existing contracts, since many contain clauses covering the document itself. And where the register reveals a problem — a likely breach, an onerous term, an obligation you cannot meet — that is a matter for advice in your jurisdiction rather than for a summary.

Conclusion

Build one obligations register rather than a set of summaries, because the register is what prevents breaches.

Extract every renewal and notice date first and diarise reminders before each window opens, find the price variation and indexation clauses, list the insurance levels, accreditations and reporting you have promised to maintain, compare termination rights on both sides, identify where a single agreement carries concentrated risk, verify the extraction against the significant documents, assign an internal owner to every contract, and review the register every quarter.