What Is AI Contract Review, and What Are the Benefits?

Integrating AI into your contract review can make this time-consuming process simpler and easier.  Read on to learn more about the benefits of incorporating AI into your contract review workflow.

What is AI contract review?

AI contract review is the use of AI tools and software to help analyze and assess the terms and conditions of a contract.  Contract reviews are crucial in the contract management process to identify and address any unfavorable terms or clauses that don’t align with your interests.

Some of these interests could include: 

• Confirming payment terms or obligations, such as due dates and penalties for late payments  
• Examining the terms of termination and renewal, especially clauses that outline the conditions under which someone can terminate the contract 
• Clarifying vague or broad language to avoid misunderstandings and disputes 

Benefits of AI contract review

Let’s discuss some ways AI contract review tools can benefit you and your team. 

Automates repetitive tasks

Tasks like data entry are a significant part of contract review, but being bogged down by these administrative tasks decreases efficiency. AI tools can help by automatically extracting key information from contracts, such as names, deadlines, and payment terms. This automation allows you to spend less time searching for pertinent data and more time on the actual review.

Expedites tasks

Additionally, by automating these repetitive tasks and quickly analyzing large volumes of contracts, AI enables your team to process documents much faster than manual methods.

Maintains accuracy

Leveraging AI contract analysis software to reduce the likelihood of human error,such as misspellings or entering incorrect data, can be a game-changer.  AI tools and features are designed to consistently apply the same criteria and rules to each contract, so all contracts will be reviewed to the same standards you’ve set.  

Identifies risks

AI can also spot potential risks and compliance issues within contracts, such as unfavorable terms, missing clauses, or inconsistencies, helping to mitigate legal and financial risks.

Bonus: You and your team can use AI to learn important legal terminologies and information that empower you to build this expertise, so you’re not solely relying on legal counsel during the negotiation process. 

Improves processes and systems

As you use and train these AI systems over time, they can improve their accuracy and efficiency by adapting to the specific needs and preferences of your  organization. As a result, you’ll continue to enhance your AI contract management. 

Key elements of AI contract review

Here are some essential components of contract review and how the best contract analysis software uses AI to efficiently complete the tasks involved in this process. 

Data extraction

As previously mentioned, data extraction becomes easier with contract review automation. For example, Concord’s contract AI analyzes a contract when you first import it, extracts key terms, auto-fills this data, and generates a summary of an agreement’s details.

 As a result, you’ll save time and resources on manual labor as you assess contracts to make informed decisions. 

Insights

When using AI for legal contracts, it’s important to continuously improve the financial performance and efficiency of the contract lifecycle. That’s why AI software automatically gathers metrics and presents actionable insights and recommendations. 

Compliance

You should always use AI software that is compliant with eSIGN and UETA regulations to minimize any legal risks and protect confidential information. All of the data extracted by Concord contract AI  is encrypted and can only be accessed by authorized users. 

Smart search

Manual searches can be stressful, so you can use AI-powered search to easily find contracts. Search for specific documents by name, date, or other terms. 

Human review

AI assists the review of contracts, but it doesn’t replace the need for human judgments. Stakeholders and legal counsel should still review AI-generated reports before making final decisions.  

Using AI for contract review saves you time and money by automating manual tasks. Through features like data extraction, these tools and technologies do the hard part for you, so you can focus on higher-level strategy. Sign contracts with the assurance and safeguards provided by artificial intelligence. 

Simplify contract review with Concord’s Agreement Intelligence, powered by AI.

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