Smart Contract Risk Assessment
Smart Contract Risk Assessment
Version 1.0.62 introduces AI-powered contract risk assessment into the Contract Lifecycle Management (CLM) module. The feature automatically analyses contracts for risks, unusual terms, and compliance issues, and surfaces the results during the review and approval workflow.
Overview
When a contract is submitted for review, an AI agent processes the full document and produces:
| Output | Description |
|---|---|
| Risk Score | A numerical score indicating overall contract risk. Higher scores warrant closer scrutiny before approval. |
| Flagged Terms | A list of unusual, non-standard, or potentially problematic clauses identified in the document. |
| Compliance Issues | Specific clauses that may conflict with internal policies or applicable regulations. |
| Automated Alerts | Notifications sent to designated stakeholders when risk thresholds are breached. |
How It Works
- Submission — A contract is uploaded or drafted within the CLM module and submitted for review.
- AI Analysis — The risk assessment agent scans the contract text, evaluating each clause against risk patterns, compliance rules, and standard contract language benchmarks.
- Risk Score Calculation — An overall risk score is computed and attached to the contract record.
- Alert Dispatch — If the risk score or specific flagged terms exceed configured thresholds, automated alerts are sent to the relevant reviewers or approvers.
- Review — Reviewers see the risk score, flagged terms, and compliance issues inline during the approval workflow, enabling faster and better-informed decisions.
Risk Score
The risk score is a numeric value assigned to every contract. It aggregates signals from:
- Presence of unusual or non-standard clauses
- Detected compliance issues
- Volume and severity of flagged terms
Use the score to triage contracts and prioritise which documents need the most careful review.
Automated Alerts
Alerts are triggered automatically when:
- A contract's risk score exceeds the configured threshold.
- One or more high-severity terms or compliance issues are detected.
Alerts are dispatched to the stakeholders assigned to the contract's review and approval workflow.
Compliance Issue Detection
The AI agent checks contract clauses against:
- Internal policies — Rules configured in your organisation's policy library.
- Regulatory requirements — Common regulatory frameworks relevant to your industry and region.
Detected compliance issues are listed with the relevant clause text and a plain-language explanation of the concern.
Availability
Smart Contract Risk Assessment is available to all organisations using the Contract Lifecycle Management module from v1.0.62 onwards. No additional configuration is required to enable basic risk analysis. Alert thresholds and compliance rule sets can be customised by administrators.