How to Build a Contract Analyzer

Analyzing contracts is a time-consuming and involved process that can require staff resources and expert knowledge. 

Too often, knowledge workers with expensive salaries spend time considering contracts, when they should be focused on more valuable work. 

But with the emergence of AI agents, teams can now automate the process of contract analysis, without needing to manually review each document.

In the following blog, we’ll show you how to create an AI agent that automatically analyzes contract documents for key information.

Contract Analysis: Challenges & Methods

Analyzing contracts is difficult, even for experienced professionals, due to their complex structure and language. Contracts are often dense, filled with industry-specific terminology, and written in precise language that aims to minimize ambiguity while covering all possible contingencies. 

This makes understanding the full scope and implications of a contract challenging, as it requires both deep knowledge and the ability to interpret context accurately. Even small wording changes can have significant impacts on the rights and obligations of the parties involved, adding another layer of complexity.

Moreover, contracts often include numerous cross-references to other sections or external documents, creating a web of interconnected obligations that can be difficult to track. This complexity is compounded when contracts undergo multiple rounds of negotiation.

Finally, the sheer volume of contracts in modern businesses can be overwhelming. For large organizations, this can mean managing thousands of documents, each with unique terms, expiration dates, and obligations. 

Without effective tools to automate contract review and extraction, businesses risk missing critical obligations or opportunities, potentially leading to costly disputes or missed revenue. This is where AI agents show promise.

How AI Agents Help with Contract Analysis

AI agents assist with contract analysis by leveraging natural language processing (NLP) and machine learning algorithms to quickly extract critical information, identify key clauses, and flag potential risks. These systems can process vast volumes of documents far faster than human reviewers, significantly reducing the time required for contract review. They are particularly effective at handling repetitive tasks, like identifying standard clauses, calculating employment dates, or checking for missing signatures, which frees up professionals to focus on more strategic analysis.

Additionally, AI agents can enhance contract consistency and accuracy by cross-referencing related documents and identifying discrepancies that might be missed during manual review. For example, they can ensure that definitions used in one part of a contract align with those in related agreements, reducing the risk of misinterpretation. This capability is particularly valuable in industries like finance, healthcare, and manufacturing, where precise language and consistency are crucial.

Finally, AI agents improve risk management by using predictive analytics to assess the likelihood of disputes or non-compliance. By analyzing past contract performance and dispute data, these systems can identify high-risk terms and suggest alternative language to reduce potential conflicts. This proactive approach not only helps avoid costly litigation but also supports more effective negotiation strategies, ultimately improving overall contract performance.

Contract Analyzer AI Agent: How to Build

Here’s how to build the contract analyzer AI agent. First, make sure to sign up for a free Stack AI account. 

Navigate to the account dashboard. Click ‘New Project’.

Click the ‘Workflow Builder’ option.

From here, choose the Contract Analyzer template. 

This will launch a pre-built agentic workflow for the Contract Analyzer.

Let’s take a look at each of the components of the workflow. First, there’s the file upload box. This is where the user uploads the contract. 

Stack AI will scan the document with OCR, and extract key data. This data is fed into a chain of four LLMs.

Each LLM extracts a different portion of data. The first extracts: “Does it require a separate NDA”.

The second extracts: “limitation of liabilities”.

The third extracts: “Start date of billing”.

The fourth extracts: “Agreement duration”.

Each LLM outputs the results into a separate output box.

Now go to the Export tab.

Give your AI agent a name and a description.

Click the link to launch the web app.

Now upload a contract and receive the analysis.

This will allow you to analyze a contract in seconds rather than hours.

Launch the Contract Analyzer Template Today!

Analyzing contracts is a difficult and time-draining process. However, with AI agents, you can reduce the time it takes to analyze contracts to a matter of seconds. 

Register a free account now to launch the free contract Analyzer template in the Stack AI platform.