Law Contract

Contract Analysis

Overview

Contract law governs enforceable agreements. This skill covers formation requirements, essential clauses, and common risk areas for business contracts. It is educational guidance, not legal advice — always consult a qualified attorney for specific situations.

Framework

IRON LAW: A Contract Requires Offer + Acceptance + Consideration + Legality

All four elements must be present for a valid contract. Missing any one
means no enforceable contract exists — regardless of how formal the document
looks. A signed document without consideration (exchange of value) is
not a contract.

Contract Formation

| Element | Definition | Test |

|---------|-----------|------|

| Offer | Clear, definite proposal with intent to be bound | Would a reasonable person understand this as a binding proposal? |

| Acceptance | Unqualified agreement to the offer's terms | Mirror image rule: acceptance must match the offer exactly |

| Consideration | Something of value exchanged by both parties | Each side gives up something (money, services, rights, promises) |

| Legality | Subject matter must be legal and parties must have capacity | No illegal purpose; parties must be competent adults or authorized entities |

Essential Contract Clauses

| Clause | Purpose | Red Flags |

|--------|---------|-----------|

| Parties | Who is bound | Incorrect entity name, no authority to sign |

| Scope/Subject | What is being exchanged | Vague deliverables, undefined terms |

| Payment terms | When and how payment occurs | No payment schedule, no late payment consequences |

| Term & Termination | Duration and exit conditions | Auto-renewal without notice, no termination for cause |

| Liability & Indemnity | Who bears risk | Unlimited liability, one-sided indemnification |

| Confidentiality (NDA) | Information protection | Overly broad definition, no time limit |

| IP ownership | Who owns created work | Ambiguous ownership of work product |

| Non-compete | Restrictions after termination | Overly broad scope/geography/duration |

| Dispute resolution | How conflicts are resolved | Foreign jurisdiction, mandatory arbitration without consent |

| Force majeure | Excused performance for unforeseeable events | Too narrow or too broad definition |

Contract Review Steps

• Identify the parties: Who is agreeing? Are entity names correct?
• Understand the deal: What is each side giving and receiving?
• Check formation elements: Offer, acceptance, consideration, legality — all present?
• Review essential clauses: Use the table above as a checklist
• Flag risk areas: Unlimited liability, one-sided terms, vague scope, auto-renewal
• Check governing law: Which jurisdiction's law applies? Is the dispute resolution mechanism acceptable?

Output Format

# Contract Review: {Agreement Type}

## Parties
- Party A: {name, role}
- Party B: {name, role}

## Deal Summary
{What is being exchanged — in plain language}

## Clause Review
| Clause | Present? | Assessment | Risk Level |
|--------|---------|-----------|-----------|
| Scope | Y/N | {notes} | 🟢/🟡/🔴 |
| Payment | Y/N | ... | ... |
| Termination | Y/N | ... | ... |
| Liability | Y/N | ... | ... |
| IP | Y/N | ... | ... |
| Non-compete | Y/N | ... | ... |

## Red Flags
1. {specific concern with clause reference}

## Recommendations
1. {suggested modification}

Examples

Correct Application

Scenario: SaaS service agreement review

• Red flag: "Vendor may modify pricing with 30 days' notice" → One-sided price change clause. Should be: pricing locked for contract term, changes only at renewal.
• Red flag: "Client indemnifies Vendor against all claims" → One-sided indemnification. Should be mutual.
• Missing: No SLA (service level agreement) defined → No recourse if service goes down. Recommend adding uptime commitment with credits ✓

Incorrect Application

• "This contract looks fine because both parties signed it" → Signature doesn't make every clause fair or enforceable. Must review individual clause terms. A signed contract with an unconscionable clause may still be challenged.

Gotchas

• "Standard contract" doesn't mean fair: Vendor-drafted "standard" contracts are drafted in the vendor's favor. Everything is negotiable.
• Taiwan-specific: Taiwan's Civil Code governs contracts. Key differences from common law: no consideration requirement (promise for promise is sufficient), mandatory provisions in certain contract types (labor, consumer).
• Auto-renewal traps: Many contracts auto-renew unless notice is given 30-90 days before expiry. Calendar the notice deadline.
• This skill is NOT legal advice: It provides educational analysis of contract concepts. Always consult a licensed attorney for binding legal decisions.

References

• For Taiwan-specific contract law (Civil Code), see references/taiwan-contract-law.md
• For common contract templates, see references/contract-templates.md