Contract Landscape Due Diligence

An anonymised case study demonstrating how our contract management and analytics technology, combined with legal, commercial, and technology expertise, provided visibility across a multinational client’s vendor contracts in support of an M&A transaction.

Situation

Challenge

Approach

Scope of the Assessment

Key Findings and Insights

Risks and Recommendations

Value and Application

Conclusion

A multinational enterprise (the “Client”) preparing for a major corporate transaction. The Client’s technology contracts were stored in a procurement portal but there was little visibility into which contracts were active, which entities were party to them, and whether important clauses such as assignment and termination rights were present.

The Client needed to quickly assess the risk profile of its vendor contract portfolio of more than 2,000 contracts, identify gaps in rights for affiliates, and understand potential impediments to assigning or novating contracts in the context of a merger or acquisition. The review needed to cover hundreds of vendor contracts within a compressed timeline of just a few business days. Manually reviewing this volume of contracts would have been impractical and cost-prohibitive.

We were granted limited access to the Client’s procurement system. Our contract management platform ingested and classified hundreds of documents at speed. Using our proprietary AI platform, the system extracted anonymised key data points such as parties, terms, assignment clauses, and termination rights. This enabled rapid identification of critical contractual details.

 The due diligence questions that structured the review were defined by the Client, with our legal team advising and our technology team supporting to ensure the questions were well-structured for optimal AI output. Our platform applied these criteria across each agreement.

 The results were validated by a cross-functional team of legal, commercial, and technology subject-matter experts. Lawyers reviewed ambiguous outputs, applied contextual understanding of the Client’s business, and ensured quality control throughout. This collaboration made it possible to produce high-quality, strategic insights without the cost or delay of a fully manual review.

 The assessment was carried out over a 3 week period from start to finish.

The due diligence assessed each vendor contract against a standard set of questions and on an anonymised basis. An overall analysis of trends and insights across the entire contract landscape was also carried out.

Key areas included:

  • Identification of the Client contracting entity and vendor name;

  • Nature of services or products procured;

  • Whether affiliates could benefit from services and if they could bring claims under the contract;

  • Whether the agreement listed the Client entities entitled to benefit;

  • Whether a separate statement of work (SOW) identified the correct contracting entity;

  • Presence of an assignment clause and whether assignment to affiliates or third parties required consent;

  • Process for effecting an assignment;

  • Contract duration and expiry;

  • Whether the contract was active as of the review date;

  • Termination rights for cause and for convenience;

  • Whether termination fees applied;

  • Whether the vendor could terminate for reasons beyond non‑payment (e.g., insolvency, force majeure);

  • Whether the vendor could terminate for change of control.

Before turning to specific themes, it is important to note that the observations below are intentionally high‑level and do not disclose confidential or company‑specific details. They reflect broad trends seen across the anonymised data set.

Contracting Parties and Services: Most contracts clearly identified the Client contracting entity and provided a reasonable description of the services, though a small minority lacked clarity on the contracting entity.

Affiliate Rights: Many agreements allowed Client affiliates to benefit from the services, often subject to a separate schedule or statement of work. Some contained an express right for affiliates to bring claims, while only a few agreements listed specific Client entities entitled to benefit.

Assignment: Most contracts contained an assignment clause. In many cases the Client could assign or novate the contract to an affiliate without the vendor’s consent, whereas only a few allowed assignment to a third party without consent. Frequently the agreements required only that the vendor be notified of an assignment rather than specifying a detailed process.

Termination Rights: Many contracts gave the Client the right to terminate for cause and, in some cases, for convenience. However, a significant proportion of agreements also gave the vendor a broad termination right, including for convenience, which created a significant financial and strategic risk for the business.

Termination Charges: Termination fees and penalties were identified across the vendor landscape. This high‑level insight allows organisations to anticipate potential costs associated with ending contracts, forecast budgets appropriately, negotiate waivers or reductions where feasible, and prioritise vendors with significant fees.

Document Availability and Storage: The contract audit revealed that documentation held in the procurement platform was often unstructured and incomplete. In many instances the latest master service terms were not stored with the vendor folder, contracts were mis‑named or expired versions were mixed with current ones, and some vendors had no documents uploaded at all. Limited access rights and inconsistent folder structures made it difficult to verify that all current, unexpired agreements had been captured. These gaps highlight the importance of a well‑maintained contract repository.

The following high‑level risks and recommendations illustrate areas organisations should consider when reviewing vendor contracts. They are presented generically to avoid revealing any confidential information about the underlying data set.

1. Termination Rights:

  • Some agreements, as in the case of this particular client’s contract due diligence review, grant the supplier a broad termination right, including for convenience, that poses a significant financial and service continuity risk. Organisations should identify such clauses and consider negotiating amendments to removal during renewals.

  • It is prudent to evaluate notice periods, minimum terms and any early termination fees when assessing termination provisions.

2. Termination Charges:

  • When negotiating termination fees, where they cannot be avoided, the guiding principle is that such charges should only be used to compensate a vendor for genuine unrecovered costs rather than to protect their revenue or margins.

  • The rationale for any fee should be explicitly linked to quantifiable losses, with conditions and calculation methods spelled out so that the fee remains transparent, proportionate and enforceable

3. Anti‑Assignment Clauses:

  • Anti‑assignment provisions can prevent the transfer of contracts to a new owner or affiliate. Contracts may completely bar assignment or require the Supplier’s consent.

  • Organisations should identify these clauses early and seek to negotiate consent rights or carve‑outs for intragroup transfers. A clause stating that consent cannot be unreasonably withheld and allowing assignment between affiliates can help to mitigate the risk.

4. Affiliate Clauses:

  • Contracts should be drafted so that affiliates can access the contracted services without the need to sign separate agreements.

  • Expressly identifying the group of affiliates or including third‑party beneficiary clauses can give them rights to benefit from the services while avoiding ambiguity about who is covered.

  • Clear drafting ensures that affiliates are included and enjoy the benefits of the agreement without imposing unintended liabilities.

5. Data Quality and Contract Storage:

  • The audit underscored that poor document management can hinder contract management and operational effectiveness therefore driving business risk.

  • The procurement system contained unstructured folders with inconsistent naming conventions, missing master agreements, outdated or expired versions and entire vendor files that were absent.

  • Organisations should implement a centralised contract management system with clear taxonomy, version control and access governance to ensure that all executed agreements and amendments are stored together, along with key metadata such as effective dates and renewal terms.

This case shows how contract analytics, powered by AI and guided by human expertise, can transform legal and commercial readiness. Without the technology, this level of analysis within the available time and budget would not have been feasible. Without the cross-functional human oversight, the AI outputs alone would not have yielded high-confidence, business-relevant conclusions.

 The outputs included:

  • An Excel-based dashboard with vendor-level responses

  • A visual summary of risks across the contract population

  • A written report of insights, opportunities, and remediation priorities

 Together, these tools helped the Client take focused action and reduce legal and operational risk in its transaction.

This project exemplifies the value of combining intelligent technology with expert human judgement. The AI platform scaled the data processing, while our legal, commercial, and technology professionals ensured relevance, accuracy, and alignment with the Client’s strategic goals. The engagement delivered a high-quality, rapid-turnaround result that would otherwise have been out of reach.