UK Contract Risk Scanner

Purpose

Analyze UK property conveyancing and pensions contracts to extract key terms, identify legal risks, compare against standard terms, and generate compliance checklists. Specialized for UK legal requirements.

Contract Types Supported

Property/Conveyancing

• Sale and purchase agreements
• Lease agreements
• Property management contracts
• Searches and surveys contracts
• Mortgage offers

Pensions

• Trust deeds
• Investment management agreements
• Administration service contracts
• Actuarial services agreements
• Custodian agreements
• Member agreements (AVCs, transfers)

General Commercial

• Service agreements
• Consultancy contracts
• Software licenses
• Data processing agreements (GDPR)

Risk Analysis Workflow

Phase 1: Document Intake and Classification

Step 1: Load contract

# Read contract document
Read(file_path="[contract-path]")

# Or search for contracts in directory
Glob(pattern="**/*{contract,agreement,deed}*.{pdf,docx,txt}")

Step 2: Classify contract type

Identify:

• Contract type (property/pensions/commercial)
• Parties involved
• Jurisdiction (England & Wales, Scotland, Northern Ireland)
• Governing law
• Contract date and term

Step 3: Extract metadata

## Contract Metadata

**Contract Type**: [Type]
**Parties**:
- Party A: [Name, Company Number]
- Party B: [Name, Company Number]

**Key Dates**:
- Execution Date: [Date]
- Commencement Date: [Date]
- Expiry Date: [Date] or "No fixed term"

**Jurisdiction**: [England & Wales/Scotland/NI]
**Governing Law**: [English Law/Scots Law]

**Value**: £[Amount] or description
**Term**: [Duration]

Phase 2: Extract Key Terms

Essential contract terms:

## Key Terms Extracted

### Parties and Representatives
- **Contracting Parties**: [Names]
- **Authorized Representatives**: [Names, roles]
- **Notice Addresses**: [Addresses for legal notices]

### Financial Terms
- **Contract Value**: £[Amount]
- **Payment Terms**: [Net 30 days / staged payments / on completion]
- **Price Variation**: [Fixed / index-linked / review mechanism]
- **VAT Treatment**: [Standard/exempt/reverse charge]
- **Late Payment**: [Interest rate, penalties]

### Performance Obligations
- **Deliverables**: [What each party must provide]
- **Performance Standards**: [KPIs, SLAs]
- **Timescales**: [Deadlines, milestones]
- **Acceptance Criteria**: [How performance is verified]

### Term and Termination
- **Initial Term**: [Duration]
- **Renewal**: [Automatic/optional, notice period]
- **Termination Rights**:
  - Convenience: [Notice period, break clauses]
  - For cause: [Material breach, insolvency]
  - Force majeure: [Scope, suspension vs termination]

### Liability and Indemnity
- **Liability Cap**: £[Amount] or [Multiple of fees]
- **Excluded Losses**: [Consequential loss, loss of profit, etc.]
- **Indemnities**: [Who indemnifies whom, for what]
- **Insurance**: [Types required, minimum amounts]

### Intellectual Property
- **Ownership**: [Who owns what]
- **Licenses**: [Rights granted, limitations]
- **Background IP**: [Pre-existing rights]
- **Moral Rights**: [Waived/retained]

### Data Protection (GDPR)
- **Controller/Processor**: [Role definitions]
- **Data Processing Terms**: [Schedule reference]
- **Data Subject Rights**: [How handled]
- **Security Requirements**: [Standards, breach notification]

### Confidentiality
- **Definition**: [What is confidential]
- **Exceptions**: [Standard carve-outs]
- **Term**: [Duration after contract end]

### Dispute Resolution
- **Governing Law**: [English/Scots law]
- **Jurisdiction**: [Courts of England & Wales/Scotland]
- **Alternative DR**: [Mediation, arbitration, expert determination]

Phase 3: Risk Identification

Risk categories with severity scoring:

High Risk 🔴

1. Unlimited Liability

❌ RISK: No liability cap or exclusions
CLAUSE: [Quote relevant clause]
IMPACT: Unlimited financial exposure
MITIGATION: Negotiate cap at [X times annual fees / £Y amount]

2. Onerous Indemnities

❌ RISK: Broad indemnity with no carve-outs
CLAUSE: "[Quote]"
IMPACT: Liability for third-party acts outside your control
MITIGATION: Add negligence qualifier, cap indemnity, require insurance

3. Automatic Renewal Without Exit

❌ RISK: Auto-renewal with long notice period
CLAUSE: "[Quote]"
IMPACT: Locked in for [X years] even if service poor
MITIGATION: Reduce notice period to [30/60/90] days

4. Intellectual Property Assignment

❌ RISK: All IP created vests in other party
CLAUSE: "[Quote]"
IMPACT: Loss of valuable IP, limits reuse
MITIGATION: Retain ownership, grant license only

5. Data Controller Risk (GDPR)

❌ RISK: Acting as data controller without DPO/systems
CLAUSE: "[Quote]"
IMPACT: ICO fines up to £17.5M or 4% turnover
MITIGATION: Clarify processor role, require client instructions

Medium Risk 🟡

6. Payment Terms

⚠️ RISK: Extended payment terms without security
CLAUSE: "[Quote]"
IMPACT: Cash flow issues
MITIGATION: Request advance payment, retention of title, personal guarantee

7. Change Control

⚠️ RISK: No mechanism for scope changes
CLAUSE: "[Quote - or note absence]"
IMPACT: Scope creep without additional payment
MITIGATION: Add formal change control process

8. Termination for Convenience

⚠️ RISK: Other party can terminate anytime, you cannot
CLAUSE: "[Quote]"
IMPACT: Loss of expected revenue
MITIGATION: Mutual termination rights or notice/payment in lieu

9. Insurance Requirements

⚠️ RISK: Excessive insurance minimums
CLAUSE: "[Quote]"
IMPACT: Uninsurable or prohibitively expensive
MITIGATION: Negotiate realistic levels based on risk

10. Non-Compete/Non-Solicit

⚠️ RISK: Broad restrictions post-termination
CLAUSE: "[Quote]"
IMPACT: Business restrictions, staff retention issues
MITIGATION: Narrow scope, reasonable duration (6-12 months max)

Low Risk 🟢

11. Standard Confidentiality

✓ ACCEPTABLE: Standard NDA provisions with exceptions
CLAUSE: "[Quote]"
IMPACT: Minimal, standard protection

12. Reasonable Liability Cap

✓ ACCEPTABLE: Cap at [X times fees / £Y amount]
CLAUSE: "[Quote]"
IMPACT: Limited, manageable exposure

Phase 4: UK-Specific Legal Checks

Property/Conveyancing Contracts

Title Issues:

# Check for:
- [ ] Title guarantee (full/limited/none)
- [ ] Incumbrances disclosed
- [ ] Planning permissions in place
- [ ] Building regulations compliance
- [ ] Rights of way clearly defined
- [ ] Boundary disputes noted
- [ ] Restrictive covenants identified

Searches and Surveys:

- [ ] Local authority search
- [ ] Environmental search
- [ ] Water & drainage search
- [ ] Chancel check (if pre-2013 property)
- [ ] Coal mining search (if applicable)

Completion:

- [ ] Completion date specified
- [ ] Time of essence clause (if critical)
- [ ] Deposit amount and holder
- [ ] Interest on deposit
- [ ] Retention for remedial works (if any)

UK Property Law Compliance:

- [ ] Complies with Law of Property Act 1925
- [ ] Meets Land Registration Act 2002 requirements
- [ ] GDPR-compliant (conveyancing data)
- [ ] Money Laundering Regulations 2017 compliance
- [ ] Estate Agents Act 1979 (if agent involved)

Pensions Contracts

Trust Deed Essentials:

- [ ] Trustee powers clearly defined
- [ ] Amendment provisions specified
- [ ] Beneficiary classes identified
- [ ] Investment powers adequate
- [ ] Conflicts of interest policy
- [ ] Indemnity provisions for trustees

Regulatory Compliance:

# Check against regulations database
mcp__neo4j-apex__read_neo4j_cypher(
  query="
    MATCH (o:Obligation)-[:APPLIES_TO]->(e:Entity)
    WHERE e.type = 'pension scheme'
    AND o.topic CONTAINS $topic
    RETURN o.title, o.requirement, o.deadline
  ",
  params={"topic": "[contract topic]"}
)

Pensions-Specific Risks:

- [ ] TPR reporting obligations clear
- [ ] Scheme Actuary terms reasonable
- [ ] Administration SLA adequate
- [ ] Custodian responsibilities defined
- [ ] Investment manager liability capped
- [ ] Conflicts of interest provisions

UK Pensions Law Compliance:

- [ ] Pensions Act 1995 compliance
- [ ] Pensions Act 2004 compliance
- [ ] TPR Codes of Practice alignment
- [ ] LGPS Regulations 2013 (if LGPS)
- [ ] FCA requirements (if investments)

GDPR/Data Protection

Data Processing Terms:

- [ ] Article 28 requirements met
- [ ] Processor obligations specified
- [ ] Sub-processor provisions included
- [ ] Data breach notification (72 hours)
- [ ] Data subject rights procedures
- [ ] Security measures defined
- [ ] Return/deletion on termination
- [ ] Audit rights included

UK GDPR Specifics:

- [ ] ICO registration confirmed
- [ ] Lawful basis identified
- [ ] UK adequacy assessment (if international transfers)
- [ ] Data Protection Act 2018 compliance
- [ ] PECR compliance (if electronic marketing)

Phase 5: Benchmarking Against Standards

Compare against standard terms:

# Search for standard terms in knowledge base
mcp__archon__rag_search_knowledge_base(
  query="standard [contract type] terms UK",
  match_count=5
)

Industry standard comparison:

Term	This Contract	Industry Standard	Assessment
Liability cap	£50,000	1-3x annual fees	Below standard
Payment terms	Net 60 days	Net 30 days	Unfavorable
Notice period	6 months	3 months	Onerous
IP ownership	Client owns all	License only	Unfavorable

Phase 6: Compliance Checklist Generation

## Contract Compliance Checklist

### Pre-Signature Requirements

#### Legal Review
- [ ] Contract reviewed by qualified solicitor
- [ ] Jurisdiction confirmed (E&W/Scotland/NI)
- [ ] Parties have legal capacity to contract
- [ ] Authority to sign verified (board resolution if needed)

#### Financial
- [ ] Contract value within authority limits
- [ ] Budget available
- [ ] Payment terms acceptable
- [ ] VAT treatment confirmed

#### Insurance
- [ ] Professional indemnity insurance adequate
- [ ] Public liability insurance in place
- [ ] Cyber insurance (if processing data)
- [ ] Certificates of insurance obtained

#### Data Protection
- [ ] DPO consulted (if applicable)
- [ ] DPIA completed (if high risk processing)
- [ ] Data processing agreement signed
- [ ] Privacy notice updated

#### Risk Assessment
- [ ] Risk register updated
- [ ] Key risks identified and mitigated
- [ ] Escalation for high-risk terms
- [ ] Insurance review completed

### Post-Signature Requirements

#### Contract Management
- [ ] Contract registered in contract management system
- [ ] Key dates diarized (renewal, termination notice)
- [ ] Performance monitoring established
- [ ] Invoice/payment tracking set up

#### Compliance
- [ ] Insurance certificates filed
- [ ] GDPR records updated
- [ ] Third-party due diligence completed
- [ ] Modern Slavery Act statement (if applicable)

#### Ongoing
- [ ] Annual contract review scheduled
- [ ] KPI/SLA monitoring active
- [ ] Relationship manager assigned
- [ ] Variation control process in place

Phase 7: Generate Risk Report

Report template:

# Contract Risk Analysis Report

**Contract**: [Title]
**Parties**: [Party A] and [Party B]
**Analyst**: Claude Opus 4.5
**Date**: [Analysis date]

## Executive Summary

[2-3 paragraph summary of contract purpose, key terms, and overall risk assessment]

**Overall Risk Rating**: [High / Medium / Low]
**Recommendation**: [Proceed / Negotiate changes / Reject]

## Contract Overview

[Detailed summary from Phase 1]

## Key Terms Summary

[Extract from Phase 2, highlighting most important 5-10 terms]

## Risk Analysis

### Critical Risks (High Priority 🔴)

[Details from Phase 3 - High risks]

**Recommendation**: These risks should be addressed before signing.

### Notable Risks (Medium Priority 🟡)

[Details from Phase 3 - Medium risks]

**Recommendation**: Address if possible, or accept with mitigation.

### Acceptable Terms (Low Risk 🟢)

[Confirmation of standard/acceptable terms]

## UK Legal Compliance

### [Contract Type] Specific Requirements

[Details from Phase 4]

### GDPR/Data Protection

[GDPR compliance check results]

### Other Regulatory Requirements

[Any other applicable regulations]

## Benchmarking

[Comparison table from Phase 5]

## Recommendations

### Must-Have Changes (Do Not Sign Without)
1. [Change 1 - with rationale]
2. [Change 2 - with rationale]

### Should-Have Changes (Negotiate If Possible)
1. [Change 1 - with rationale]
2. [Change 2 - with rationale]

### Nice-to-Have Changes (Opportunistic)
1. [Change 1 - with rationale]

## Compliance Checklist

[Checklist from Phase 6]

## Negotiation Strategy

### Priorities
1. **Critical**: [Issue] - [Why it's important] - [Fallback position]
2. **Important**: [Issue] - [Why it's important] - [Fallback position]

### Likely Counter-Arguments
- [Argument 1] - [Your response]
- [Argument 2] - [Your response]

### Trade-Offs
- Willing to accept [X] if they agree to [Y]
- Can concede on [A] to secure [B]

## Next Steps

1. [Immediate action]
2. [Follow-up action]
3. [Long-term action]

## Appendices

### A. Risk Register

| ID | Risk | Severity | Likelihood | Impact | Mitigation | Owner |
|----|------|----------|------------|--------|------------|-------|
| R1 | [Risk] | High | High | £[X] | [Action] | [Person] |

### B. Clause-by-Clause Analysis

[Detailed clause analysis if required]

### C. Regulatory References

- [Regulation 1]
- [Regulation 2]

---

**Disclaimer**: This analysis is for guidance only and does not constitute legal advice. Contracts should be reviewed by a qualified solicitor before signing.

**Generated by**: Claude Opus 4.5 via UK Contract Risk Scanner
**Date**: [Timestamp]

Red Flags Quick Reference

STOP - Do Not Sign If:

• ❌ Unlimited liability with no cap
• ❌ Unilateral termination (they can exit, you can't)
• ❌ Assignment of all IP you create
• ❌ Personal guarantees without discussion
• ❌ Non-compete preventing you from working
• ❌ Jurisdiction in foreign country without reason
• ❌ Payment only on completion (for long projects)
• ❌ Waiver of consequential loss exclusion
• ❌ Data controller role without DPO/systems
• ❌ Indemnity for their negligence

CAUTION - Negotiate These:

• ⚠️ Payment terms >30 days
• ⚠️ Automatic renewal >1 year
• ⚠️ Liability cap <1x annual fees
• ⚠️ Broad confidentiality (no standard exceptions)
• ⚠️ Exclusive supply obligations
• ⚠️ Excessive insurance requirements
• ⚠️ No change control process
• ⚠️ Vague performance standards
• ⚠️ Long termination notice (>3 months)
• ⚠️ Restrictive non-solicit clauses

Common UK Contract Law Issues

Misrepresentation Act 1967:

• Pre-contractual statements may be actionable
• Check warranty/representation language carefully

Unfair Contract Terms Act 1977:

• Cannot exclude liability for death/personal injury
• Reasonableness test for B2B exclusions
• Entire agreement clauses must be reasonable

Late Payment of Commercial Debts Act 1998:

• Statutory right to interest (8% + base rate)
• Automatic unless contract specifies different rate

Supply of Goods and Services Act 1982:

• Implied terms about quality and fitness for purpose
• Services must be provided with reasonable care

Integration with Other Skills

• lgps-scheme-amendment-analyzer: For pension scheme contracts
• conventional-commits-uk: If tracking contract reviews in git
• github-workflow: Version control for contract templates
• cost-optimizer: Use Opus for high-value contracts only

Quick Commands

# Search for risk keywords in contract
grep -iE "limit|liability|indemnit|warrant|terminat|arbitrat" contract.txt

# Extract financial terms
grep -iE "£|GBP|payment|fee|cost|price" contract.txt

# Find dates
grep -Eo "[0-9]{1,2}[/ -][0-9]{1,2}[/ -][0-9]{2,4}" contract.txt

# Extract parties
grep -i "party\|parties\|between" contract.txt | head -10

Summary

This skill provides comprehensive UK contract risk analysis by:

• Extracting key terms systematically
• Identifying legal risks with severity ratings
• Checking UK-specific compliance (GDPR, property law, pensions law)
• Benchmarking against industry standards
• Generating negotiation strategies
• Providing compliance checklists

Always use Opus model for contract analysis due to legal complexity and high stakes.

Helps ensure contracts protect your interests while complying with UK legal requirements.