3 Steps To Detecting Contract Obligations With Contract AI

CobbleStone Software explains three steps to detect contract obligations with contract intelligence.

Contract obligations are a foundational part of any contract. Without the performance of obligations, the terms and conditions of a contract are not met, resulting in a breach of contract. As such, each contract party's obligations should be easily accounted for without any oversights. Thankfully, future-minded and AI-powered contract management software can greatly support and simplify that process. To that end, here are three steps to detect contract obligations with contract intelligence.

#1 - Extract Obligation Data & Language

The primary step in detecting contract obligations is determining the parts of a contract relevant to obligations and key tasks. With contract artificial intelligence, users can do this more quickly than ever.

Contract intelligence can be used to quickly identify and extract key metadata points from contracts and sentences within them - including obligations information such as payment terms, task performance dates and requirements, insurance requirement tasks, subcontracting and assignments, termination conditions, and penalties for non-compliance - just to name a few. This information is segregated, recognized, and can be easily searched and reported on.

But there might be many disparate obligations-related items and sentences in a sea of other legalese. How can legal professionals quickly spot the difference?

#2 - Leverage Natural Language Processing for Obligations

In addition to extracting data into digestible and searchable information, contract AI allows users to leverage natural language processing (NLP) to detect if a sentence or section implies an obligation.

Contract artificial intelligence identifies and extracts text and clauses using natural language processing with intelligent fuzzy logic matching of legal phrases and terms and structured data recognition. This means that users can quickly detect language specifically relevant to obligations and the tasks to reform to meet those obligations.

#3 - Take Action on Obligations or Disregard

Once users have extracted contract metadata and leveraged NLP and named entity recognition to specify and hone in on obligations-related terms, they can start with obligations performance! Users can either ignore sections found to be obligations-related or begin task performance in their AI-powered solution. For those obligations legal professionals choose not to ignore, they can leverage intelligent workflow automation.

Highly configurable workflow automation engages the right people at the right time with virtually unlimited contract notifications, real-time auto-alerts, and steps. Workflow processes can be built and tracked to more easily manage contract creation, negotiation, approval, and subsequent obligations. Intelligent workflow automation reduces risk and contract approval process cycle time by eliminating bottlenecks and ensuring accountability.

For better obligations management, contract intelligence can alert key users of contract events and milestones — including obligatory tasks — with automated notification alerts. Each task is sent to the assigned user's email inbox and calendar to approve at the office or on-the-go — saving time and resources. Additionally, in the interest in avoiding failure in obligations, those users who are not performing their tasks in a timely manner can have their tasks automatically escalated to keep the process moving and avoid bottlenecks!

Contract Artificial Intelligence: Beyond Just Contract Obligations

Now you know how to detect and perform contract obligations in a manner as simple as "1, 2, 3!" However, this is just a scratch at the surface of the amazing benefits you can reap from leveraging robust contract intelligence solutions.

Leading contract AI solutions - such as VISDOM^® AI - support future-minded contract management processes such as: