Contract Analysis Agent

Contract Analysis Agent

Ensure Accuracy & Compliance with AI-Powered Contract Analysis

About the Agent

The Contract Analysis Agent leverages generative AI to streamline contract review by categorizing key contract details and ensuring compliance with accounting standards and regulatory requirements. By automating document analysis, it eliminates time-consuming manual reviews, allowing finance and legal teams to focus on strategic decision-making and risk assessment.

With advanced AI-driven scanning, the agent accurately identifies discrepancies, missing terms, and deviations from compliance benchmarks, ensuring contracts align with internal policies and accounting standards such as ASC 606, ASC 842, IFRS 15, and IFRS 16. It flags inconsistencies in revenue recognition, payment terms, obligations, and lease accounting, reducing the risk of financial misstatements and enhancing audit readiness.

By automating contract verification, the agent mitigates risks associated with manual errors, strengthens financial reporting accuracy, and ensures contractual obligations are met in accordance with industry standards.

How it Works

  • AI-Powered Contract Scanning
    Our AI agent reads contracts, identifies predefined fields, and extracts critical information with high accuracy.

  • Structured Data Extraction
    Extracted fields are stored in structured formats such as Excel, JSON, or APIs for seamless integration with your existing systems.

  • Custom Rule-Based Compliance Checks
    Configure specific compliance rules to ensure contract terms align with regulatory and internal guidelines.

  • Automated Reports & Insights
    Generate detailed compliance reports to streamline auditing and governance processes.

Who Can Benefit?

  • Legal Teams – Automate compliance reviews and reduce manual effort.

  • Finance Departments – Extract payment terms, financial obligations, and penalties.

  • Procurement Teams – Ensure contract terms align with vendor agreements.

  • Auditors – Verify contract compliance at scale.

Why Choose Sthambh?

  • AI-Driven Accuracy – Ensure data integrity with advanced NLP and machine learning models.

  • Customizable Workflows – Adapt the AI agent to your compliance needs.

  • Enterprise-Grade Security – Your contracts remain secure and confidential.

Sample of data set required for Contract Analysis Agent:

Input Data Set
Deliverable Example

Sample output delivered by the Lease Agreement Compliance Agent:

Contract Analysis Report

Overview
The Contract Compliance Agent was deployed to review the agreement between Skyline Logistics Inc. (Service Provider) and Aurora Retail Group (Client). This report examines the compliance of the contract based on internal contract policies, service level expectations, and accounting standards including ASC 606 (Revenue Recognition) and IFRS 15 (Revenue from Contracts with Customers).

1. Contract Duration & Renewal

Policy Requirements:

  • Contracts should specify the start and end dates, renewal conditions, and termination terms.

Contract Analysis:

  • Start Date: January 1, 2024
  • End Date: December 31, 2026
  • Renewal Option: Automatic one-year renewal unless either party provides a 90-day notice before expiration.
  • Termination Clause: Early termination requires 120-day notice with penalties for non-performance.

✅ Compliance: Fully Compliant

2. Payment Terms & Revenue Recognition

Policy Requirements:

  • Payments must align with ASC 606 and IFRS 15 revenue recognition principles.
  • Late payment penalties and invoicing cycles must be clearly defined.

Contract Analysis:

  • Base Service Fee: $75,000 per quarter
  • Variable Charges: Fuel surcharge adjustments applied quarterly
  • Invoicing Cycle: Net 30 days from invoice date
  • Late Payment Penalty: 3% per month on overdue balances
  • Revenue Recognition: Recognized upon service completion, per milestone-based invoicing

✅ Compliance: Fully Compliant

3. Service Level Commitments

Policy Requirements:

  • Clear performance metrics and penalties for non-compliance must be outlined.

Contract Analysis:

  • On-Time Delivery Commitment: 95%+ within agreed timelines
  • Tracking & Visibility: Real-time tracking via provider’s platform
  • Failure Resolution: Incidents must be addressed within 24 hours
  • Compensation for Delays: Credit for deliveries delayed beyond 48 hours (unless force majeure applies)

✅ Compliance: Fully Compliant

4. Liability & Insurance Requirements

Policy Requirements:

  • The provider must carry general liability and cargo insurance.

Contract Analysis:

  • Provider’s Insurance Coverage:
    • General Liability: $5,000,000 per occurrence
    • Cargo Insurance: Up to $500,000 per shipment
  • Client’s Insurance Obligations:
    • Requires warehouse liability insurance for stored goods

✅ Compliance: Fully Compliant

5. Regulatory & Legal Compliance

Policy Requirements:

  • The contract must adhere to ASC 606, IFRS 15, DOT (Department of Transportation) regulations, and local labor laws.

Contract Analysis:

  • Regulatory Compliance:
    • Meets ASC 606 & IFRS 15 for revenue recognition
    • Adheres to FMCSA and DOT guidelines for transport safety
    • Includes data privacy compliance (GDPR for EU shipments)

✅ Compliance: Fully Compliant

6. Termination & Dispute Resolution

Policy Requirements:

  • The contract must include clear dispute resolution procedures and conditions for early termination.

Contract Analysis:

  • Termination for Cause: Either party may terminate with 90 days’ notice due to breach of contract.
  • Dispute Resolution: Mandatory mediation followed by arbitration in New York, NY if unresolved.

✅ Compliance: Fully Compliant

7. Additional Provisions

Policy Requirements:

  • Indemnification and governing law clauses should be explicitly defined.

Contract Analysis:

  • Indemnification Clause: The service provider indemnifies the client against losses due to operational failures.
  • Governing Law: The contract falls under Delaware State Law.

✅ Compliance: Fully Compliant

Summary

The compliance review confirms that the contract between Skyline Logistics Inc. and Aurora Retail Group adheres to internal policy requirements, regulatory standards, and accounting principles. The Contract Compliance Agent verifies alignment with ASC 606, IFRS 15, and industry best practices, ensuring operational and financial integrity.

✅ Overall Compliance Status: Fully Compliant

Recommendations

  • Periodic compliance audits should be conducted to ensure adherence to evolving regulations.
  • Automated monitoring can help detect deviations in performance metrics or financial reporting.
  • Human oversight is recommended for high-value contracts to reinforce compliance measures.

Prepared By: Contract Compliance Agent
📅 Date: February 14, 2025

 

Partner with Us for Comprehensive IT

The Lease Agreement Compliance Agent leverages generative AI to optimize the contract compliance process by classifying lease agreement details into key compliance categories. By automating document reviews, it eliminates labor-intensive manual checks. 

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