Learning Timeline
Key Insights
Termination Clause Tip
AI often flags 'Indefinite' clauses (those without a time limit) as a risk. Pro-tip: Ask the AI to check if a duration of 3 to 5 years would be more appropriate for the specific contract.
Importance of Breach Clauses
Always check if the AI reports a missing 'Consequence of Breach' clause. This is a critical element that is frequently overlooked in early contract drafts.
AI Model Limitations
While AI models like GPT-4 are incredibly fast at analyzing text, the quality of the output depends heavily on the version being used. Newer 'Frontier' models generally provide sharper, more nuanced analysis compared to older versions.
Prompts
NDA Red Flags Analysis Prompt
Target:
ChatGPT
Analyze this NDA document for any red flags or missing important clauses. Look for issues like indefinite termination periods, lack of consequences for breaches, or missing third-party clauses. Provide a detailed breakdown.
Step by Step
How to Analyze NDA Documents Using AI
- Open the ChatGPT interface or your preferred AI model that supports file upload features.
- Click the 'Attach' or 'Upload' icon (usually a paperclip icon) in the input bar.
- Select the NDA PDF file you want to analyze from your computer.
- Enter a prompt to instruct the AI to look for risks or 'Red Flags' within the document.
- Press 'Enter' to begin the analysis process.
- Review the generated output, focusing on sections like 'Termination', 'Breach of Contract', and 'Third-party Clauses'.
- If the output is too brief, ask the AI to provide a more detailed 'Breakdown' for each risky clause identified.
