Understanding Your Contract Risk Score
Guard-Clause assigns a risk score from 0 to 100 based on the number and severity of issues found in your contract. Here is what the score means and how to act on it.
The 0\u2013100 Risk Scale
Low Risk
The contract follows standard, fair terms with no significant red flags. Clauses are balanced and typical for the contract type. Most provisions protect both parties reasonably.
What to do: Review the findings for awareness, but this contract is generally safe to sign as-is. Check any info-level findings for terms you want to understand before committing.
Moderate Risk
The contract contains clauses that favor the other party or include terms worth negotiating. Common issues include broad IP assignments, aggressive non-competes, or payment terms that create cash flow risk.
What to do: Use the negotiation pack to push back on medium and high findings. Most of these are negotiable, especially if the other party wants the deal to close. Propose amendments using the addendum builder.
High Risk
The contract has multiple serious issues that could cost you money, limit your future options, or create significant liability exposure. Several clauses meaningfully favor the other party.
What to do: Address all critical and high findings before signing. Use the negotiation pack aggressively. If the other party refuses to negotiate on critical items, consider whether the deal is worth the risk. Consult an attorney for the most severe findings.
Severe Risk
The contract contains deal-breaking clauses across multiple categories. Signing as-is would create substantial financial, legal, or professional risk. The agreement is heavily tilted against your interests.
What to do: Do not sign without significant revisions. Send the full addendum as a counter-proposal. If the other party will not negotiate, seriously consider walking away. Consult an attorney before signing any contract in this range.
Severity Levels
Each finding is assigned one of 5 severity levels. The risk score is computed from the count and severity of all findings.
Critical
Immediate action required. These clauses create severe financial, legal, or professional risk if signed as-is. Do not sign without addressing these first.
Examples
- Unlimited IP assignment covering all work, including personal projects
- Uncapped personal liability or indemnification with no ceiling
- Perpetual non-compete with no geographic or industry limitation
- Automatic assignment of pre-existing IP to the other party
High
Address before signing. These clauses significantly favor the other party and are likely to cause problems during or after the contract term.
Examples
- Non-compete lasting 2+ years or covering an unreasonably broad industry
- Termination for convenience with no kill fee or notice period
- Payment terms of net-90+ with no late penalty
- One-sided arbitration in the other party's home jurisdiction
Medium
Worth negotiating. These clauses are common but tilted in the other party's favor. Negotiating them improves your position without being a dealbreaker.
Examples
- Work-for-hire designation on deliverables where licensing would be fairer
- Confidentiality period extending 3+ years beyond contract termination
- Scope definition that is broad enough to enable scope creep
- Insurance requirements above what is typical for the contract value
Low
Note and monitor. These clauses are slightly one-sided but within normal range. Worth understanding but unlikely to cause significant problems.
Examples
- Standard governing law clause favoring the other party's state
- Non-solicitation of employees for 12 months after termination
- Assignment clause requiring consent for contract transfer
- Force majeure clause with a standard definition
Info
Awareness only. These are noteworthy clauses that are standard, balanced, or informational. No action needed, but good to understand what you are agreeing to.
Examples
- Entire agreement / merger clause (standard boilerplate)
- Notice provisions specifying communication methods
- Severability clause (if one provision is void, the rest survive)
- Amendment clause requiring written mutual consent
Risk Categories
Every finding is classified into one of these 10 categories. The category tells you which area of the contract is affected.
Intellectual Property
Who owns the work product, pre-existing IP rights, licensing terms, and assignment scope. Critical for freelancers and agencies.
Non-Compete & Non-Solicitation
Restrictions on future work, client relationships, and employee hiring after the contract ends. Duration, scope, and enforceability vary by jurisdiction.
Payment & Compensation
Payment timing, milestones, late penalties, expense reimbursement, and net terms. Directly affects cash flow and financial risk.
Termination
How the contract ends, notice periods, termination for cause vs. convenience, kill fees, and what happens to work in progress.
Liability & Indemnification
Liability caps, indemnification obligations, insurance requirements, and limitation of damages. Defines your maximum financial exposure.
Confidentiality
What is considered confidential, how long the obligation lasts, carve-outs for public information, and penalties for breach.
Dispute Resolution
How disagreements are resolved: litigation, arbitration, or mediation. Includes forum selection, governing law, and fee-shifting provisions.
Scope & Change Orders
What work is included, how changes are handled, approval processes, and whether additional work triggers additional compensation.
Warranties & Representations
Promises each party makes about their authority, the work product, and compliance with laws. Breach of warranty can trigger indemnification.
Data & Privacy
How personal data and confidential information are collected, stored, processed, and shared. Includes compliance obligations and breach notification requirements.
How to Act on Your Score
Start with Critical Findings
Open the findings tab and read every critical-severity finding first. These are the clauses that create the most risk. Each finding cites the exact excerpt from your contract so you can verify what the AI flagged.
Move Through High Findings
High findings are the next priority. These clauses significantly favor the other party and should be addressed before signing. Check the persona impact statement to understand why each one matters to your specific role.
Review Medium Findings in Context
Medium findings are worth negotiating but not dealbreakers. Review them in context. If the overall deal is strong, you may choose to accept some medium risks in exchange for concessions elsewhere.
Use the Negotiation Pack
Open the negotiation tab. Start with the email draft for written communication, or use the call script for verbal negotiation. The prioritized asks tell you which changes to push for first and what fallback positions to offer.
Propose Amendments with the Addendum Builder
For each clause you want changed, the addendum builder provides replacement language and an explanation. Copy the formatted addendum note and attach it to your counter-proposal or send it as a separate document.
See Your Contract’s Risk Score
Upload a contract and get a risk score with cited findings in under 5 minutes. Or browse a sample report to see the scoring in action.