# Contract Review Playbook: [Contract type, e.g. customer subscription agreement]

> A contract review playbook for an in-house legal team: the scope and
> paper it covers, review tiers, clause-by-clause negotiation positions
> (preferred, fallback and walk-away), the approval matrix for
> deviations, the escalation path, a deviation log and how the playbook
> is kept current. It is built from in-house practice, not from a
> published standard. Laws named in it are dated EU, UK and US examples
> with official links, not a statement of what applies to you. Replace
> every `[bracketed]` value and every row marked *Example*. This is a
> documentation format, not legal advice; check the current official
> texts and consult a qualified professional before relying on any
> position.

<!--
Guidance: How to use this template
- Write one playbook per contract family (for example sell-side
  subscription, buy-side software, NDA, data processing). Positions
  that make sense when you sell are often wrong when you buy.
- Fill section 2 (scope) and section 4 (approval matrix) first. A
  clause position is only useful when the reviewer knows who may
  approve moving away from it.
- Each clause in section 5 has three positions: preferred (your
  template wording), fallback (what a reviewer may agree without
  escalation, or with the approver named in the row) and walk-away (the
  point beyond which the deal needs the top approver or is declined).
- The worked example is fictional: Quillmere Systems Ltd, a business
  software company with entities in the UK, Ireland and the US, selling
  annual subscriptions. Delete it before use.
- Related documents: Matter Intake and Triage
  (`legal-ops/matter-intake-triage`), NDA (`legal-lite/nda`), Data
  Processing Agreement (`legal-lite/dpa`), SLA Outline
  (`legal-lite/sla-outline`), Contract Register
  (`procurement/contract-register`), Delegation of Authority Matrix
  (`finance/delegation-of-authority-matrix`), Legal Register
  (`compliance/legal-register`).
- Common pitfall: a playbook that lists only the preferred position.
  Reviewers then either escalate everything or improvise, and both
  defeat the purpose.
-->

## Document control

<!-- Guidance: The general counsel owns the playbook. Finance and the business owner approve because positions on liability, payment and price protection carry commercial cost. A change to any walk-away position is a new major version. -->

| Field | Value |
|---|---|
| Document ID | [LEG-PB-001] |
| Version | [1.0] |
| Status | [Draft / Approved / Under revision] |
| Owner | [@general-counsel] |
| Approvers/reviewers | [@cfo], [@chief-revenue-officer], [@head-of-commercial-legal] |
| Last updated | YYYY-MM-DD |
| Classification | [Confidential, legally privileged where applicable, internal use only] |
| Contract family | [Sell-side subscription / Buy-side software / NDA / Other] |
| Template paper | [Template name and version, link] |
| Governing law of template | [England and Wales / Ireland / New York / Other] |
| Next review | YYYY-MM-DD |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| General counsel | [@general-counsel] | [Approved] | YYYY-MM-DD |
| Chief financial officer | [@cfo] | [Approved financial positions in 5.1, 5.6, 5.9] | YYYY-MM-DD |
| Business owner | [@chief-revenue-officer] | [Approved] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 1.0 *(Example)* | 2026-10-30 | Head of commercial legal | First issue |
| 1.1 *(Example)* | YYYY-MM-DD | [Author] | [Fallback on liability cap raised after quarterly review, see 7.2] |

## Contents

1. Purpose and principles
2. Scope and paper
3. Review tiers and turnaround
4. Approval matrix
5. Clause positions
6. Escalation and negotiation process
7. Deviation log and playbook maintenance
8. Training and access
9. Glossary and references

## 1. Purpose and principles

<!-- Guidance: State why the playbook exists and the few principles a reviewer applies when a clause is not covered. Keep it to one screen. -->

This playbook lets reviewers inside and outside the legal team close
contracts of the family named in Document control quickly and
consistently, while keeping risk inside limits the business has
accepted in advance. It turns the judgment of senior lawyers into
written positions, so that the same request receives the same answer
whoever reviews it.

Principles:

- **Start from our paper.** Review on the organisation's template
  wherever possible. When the counterparty insists on its own paper,
  map its clauses to section 5 before marking up.
- **Positions, not wording.** The positions describe outcomes. A
  reviewer may accept different wording that reaches the same outcome.
- **Risk follows value.** The tier in section 3 and the approver in
  section 4 depend on contract value and risk, not on who asks.
- **Write down every deviation.** Every agreed move to a fallback or
  beyond is recorded in the deviation log (section 7.1), so that the
  playbook learns from real deals.
- **No silent changes.** Reviewers do not accept changes in clean
  documents; they compare against the last agreed version every time.
- **Not legal advice to the business user.** Business reviewers apply
  the positions; they do not interpret law. Anything outside the
  playbook goes to legal.

## 2. Scope and paper

<!-- Guidance: Be precise about what the playbook covers. A reviewer must be able to tell in one minute whether a contract is in scope. Name the template version, because positions refer to its clause numbers. -->

| Item | In scope | Out of scope (route to legal) |
|---|---|---|
| Contract type | [Annual or multi-year subscription agreements on our template] | [Reseller, OEM, joint development, public sector framework agreements] |
| Value | [Annual contract value up to USD 1,000,000] | [Above USD 1,000,000 or any deal with uncapped commitments] |
| Paper | [Our template v4.2; counterparty paper for enterprise customers] | [Counterparty paper with governing law outside the approved list] |
| Counterparty | [Private companies] | [Government bodies, regulated financial entities that require regulatory contract clauses] |
| Geography | [UK, EU, US customers] | [Sanctioned or high-risk jurisdictions: see `compliance/sanctions-exposure-assessment`] |

**Template paper and related documents.**

| Document | Version | Owner | Link |
|---|---|---|---|
| Subscription agreement *(Example)* | v4.2 | Commercial legal | [link] |
| Data processing agreement | [v2.0] | Privacy counsel | `legal-lite/dpa` |
| Service level agreement | [v1.3] | Head of support | `legal-lite/sla-outline` |
| Mutual NDA | [v3.1] | Commercial legal | `legal-lite/nda` |

## 3. Review tiers and turnaround

<!-- Guidance: Tiers decide who reviews, not who approves. Route by value and risk flags. Turnaround times are internal service targets, measured from a complete request. -->

| Tier | Criteria | Reviewer | Turnaround target *(Example)* |
|---|---|---|---|
| T0 Self-serve | Our paper signed unchanged, value below [USD 50,000] | Sales operations | Same day |
| T1 Standard | Our paper, changes only within fallback positions | Contract manager | 2 business days |
| T2 Negotiated | Counterparty paper, or any change beyond fallback | Commercial lawyer | 5 business days |
| T3 Strategic | Value above [USD 500,000], uncapped exposure, or a red flag in section 5 | Head of commercial legal with general counsel | Agreed per deal |

Red flags that move a contract to T3 regardless of value:

- Any request for unlimited liability other than the carve-outs in
  5.1.
- Most-favoured-customer pricing, exclusivity or non-compete
  obligations on the organisation.
- Source code escrow release triggers wider than insolvency and
  discontinuation.
- Transfer of ownership of the organisation's pre-existing
  intellectual property.
- Audit rights over the organisation's premises without notice limits.

Requests arrive through the legal intake channel described in
`legal-ops/matter-intake-triage`; a contract request without the
deal value, counterparty name and current draft is not complete and
the turnaround clock does not start.

## 4. Approval matrix

<!-- Guidance: Align approval limits with the delegation of authority matrix (`finance/delegation-of-authority-matrix`). Legal approval of the legal position does not replace the commercial and financial approvals the DoA requires. -->

| Deviation | Contract manager | Commercial lawyer | Head of commercial legal | General counsel | CFO |
|---|---|---|---|---|---|
| Within fallback position | Approve | | | | |
| Between fallback and walk-away, ACV below [USD 250,000] | | Approve | | | |
| Between fallback and walk-away, ACV [USD 250,000] or more | | Recommend | Approve | | |
| Beyond walk-away on a legal clause | | | Recommend | Approve | |
| Beyond walk-away on liability, indemnity, payment or price | | | Recommend | Approve | Approve |
| Clause not covered by the playbook | | Recommend | Approve | | |

Rules:

- Approval is recorded in the contract management system or by email
  to the deal record, with the clause, the agreed wording and the
  reason.
- Approvers cannot approve deviations on deals they sell or are
  personally compensated on.
- An approval covers one deal. Repeated approvals of the same
  deviation trigger a playbook review (section 7.2).

## 5. Clause positions

<!-- Guidance: For each clause give the purpose, the three positions, the approver for moving past fallback and a short note on why. Write positions as outcomes. Figures are examples to be replaced by numbers the CFO has approved. -->

Each table uses the same columns. "Preferred" is the template. The
reviewer named in section 4 may agree the fallback. Beyond the
walk-away, the deal needs the top approver in section 4 or is declined.

### 5.1 Limitation of liability

Purpose: keep total exposure in proportion to the revenue from the
contract, and keep certain liabilities outside the cap where the law
or fairness requires it.

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| General cap | Fees paid or payable in the 12 months before the claim | 1.5 times annual fees | Above 2 times annual fees, or uncapped |
| Exclusion of indirect and consequential loss | Mutual, with lost profits and lost data excluded | Lost data recoverable as restoration cost only | No exclusion of indirect loss |
| Carve-outs from the cap | Death or personal injury caused by negligence, fraud, wilful misconduct, liabilities that cannot be limited by law | Add breach of confidentiality, capped at 2 times annual fees (super cap) | Uncapped data protection or confidentiality liability |
| Data protection liability | Within the general cap | Super cap of [2] times annual fees | Uncapped |

Note: some liabilities cannot be excluded or limited by law. For
example, under the law of England and Wales a contract term cannot
exclude or restrict liability for death or personal injury caused by
negligence (Unfair Contract Terms Act 1977, section 2(1),
https://www.legislation.gov.uk/ukpga/1977/50/section/2). Other legal
systems have comparable rules; ask counsel for the governing law of
the contract.

*Example (Quillmere):* annual fees of USD 240,000. Preferred cap USD
240,000, fallback cap USD 360,000 (1.5 times), walk-away above USD
480,000 (2 times). A customer asks for a cap of USD 500,000: this is
above 2 times annual fees (USD 480,000), so it needs the general
counsel and the CFO.

### 5.2 Indemnities

Purpose: allocate third-party claims to the party that controls the
risk.

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Our IP infringement indemnity | Third-party claims that the service infringes IP, with standard exclusions (customer modifications, combinations, customer content) | Remove the combination exclusion where we supplied the combined item | Indemnity for customer content or for open-source components the customer chose |
| Remedies for infringement | Modify, replace, license or terminate and refund prepaid unused fees | Refund of fees for the affected period of up to 12 months | No termination right |
| Customer indemnity | Customer content and unlawful use | Customer content only | No customer indemnity where customer uploads third-party data |
| Procedure | Prompt notice, sole control of defence, reasonable cooperation | Customer may join with own counsel at its cost | No control of defence |

### 5.3 Intellectual property

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Pre-existing IP | Each party keeps its own | No change | Any assignment of our pre-existing IP |
| Customer data and content | Customer owns, we receive a licence to provide the service | Licence limited to the term and to service delivery | No right to use aggregated, de-identified usage data for service improvement, if the business requires it |
| Feedback | Free licence to use feedback | Feedback not attributed to customer | Feedback owned by customer |
| Custom deliverables | We own, customer receives a licence | Customer owns deliverables made only for it, excluding our tools | Customer owns our platform changes |

### 5.4 Confidentiality

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Term | Contract term plus 3 years, trade secrets while they remain secret | Plus 5 years | Perpetual for all information |
| Permitted disclosure | Employees, contractors and advisers with a need to know, under equal duties | Add affiliates | No disclosure to subcontractors |
| Compelled disclosure | Allowed with notice where lawful | Add cooperation to seek a protective order | No compelled disclosure exception |

Align with the stand-alone NDA (`legal-lite/nda`) so that the two do
not conflict when both exist.

### 5.5 Data protection

Purpose: meet the controller and processor rules of the applicable
data protection law and keep the processing terms in one place.

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Processing terms | Our DPA (`legal-lite/dpa`) incorporated by reference | Customer DPA if it covers the required processor terms | Missing processor terms required by law |
| Sub-processors | General authorisation, published list, notice of changes, right to object | 30-day notice instead of 14 | Prior specific consent for every sub-processor |
| Audit | Reports and certificates first, on-site audit once a year with 30 days' notice | On-site audit on request after a security incident | Unlimited, unannounced audits |
| Breach notice to customer | Without undue delay | Within [48] hours of confirming the breach | A fixed period shorter than the time needed to confirm facts |
| International transfers | Transfer mechanism named in the DPA | Customer's preferred mechanism if it is a lawful one | Transfers prohibited outright where the service needs them |

Under the EU and UK GDPR, a contract with a processor must cover the
matters in Article 28(3) of Regulation (EU) 2016/679
(https://eur-lex.europa.eu/eli/reg/2016/679/oj). US state privacy laws
set their own contract terms for service providers. Privacy counsel
confirms which regimes apply.

### 5.6 Payment and price

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Payment terms | 30 days from invoice | 45 days | More than 60 days |
| Annual price increase | Up to [7]% at renewal | Capped at [5]% or a published inflation index | Fixed price for more than 3 years |
| Late payment | Interest at the rate allowed by law and suspension after notice | No suspension for the first [30] days | No remedy for non-payment |
| Most-favoured-customer pricing | Not offered | Not offered | Any MFC clause (T3 red flag) |

Note: statutory late payment rules differ between jurisdictions and
may set minimum interest or payment periods for business
transactions. Check the governing law with finance and counsel.

### 5.7 Warranties and service levels

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Performance warranty | Service performs materially as described in the documentation | Add warranty that we will not materially reduce functionality during the term | Fitness for a particular purpose |
| Remedy | Fix or, failing that, terminate and refund prepaid unused fees | Add service credits under the SLA | Damages outside the liability cap |
| Service levels | SLA (`legal-lite/sla-outline`), credits as sole remedy for availability | Termination right after [3] consecutive months below target | Credits above [25]% of monthly fees |

### 5.8 Term, termination and exit

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Initial term and renewal | 12 months, auto-renews with 60 days' notice | 30 days' notice | No renewal mechanism on a multi-year price commitment |
| Termination for convenience | None during a committed term | Customer may terminate with 90 days' notice, prepaid fees not refunded | Termination for convenience with refund |
| Termination for breach | Material breach not cured in 30 days | 15 days for payment breaches | No cure period |
| Data return and deletion | Export available for 30 days after termination, then deletion | 60 days | Indefinite retention for the customer |

### 5.9 Insurance

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Cover maintained | Professional indemnity and cyber cover at levels set by [insurance manager] | Certificate on request | Customer named as additional insured on all policies |
| Limits | [USD 5,000,000] per claim *(Example)* | [USD 10,000,000] if available at current premium | Limits above current cover |

Insurance positions must be checked with the insurance manager every
renewal year; the figures are examples only.

### 5.10 Governing law, disputes and assignment

| Element | Preferred | Fallback | Walk-away |
|---|---|---|---|
| Governing law | Law of the contracting entity's home jurisdiction | Customer's home law within the approved list [England and Wales, Ireland, New York, Delaware, California] | Any law outside the approved list |
| Disputes | Courts of the governing law, with executive escalation first | Arbitration under [named rules] in [seat] | No forum clause |
| Assignment | Either party with consent, except to an affiliate or in a sale of business | Notice instead of consent for change of control | Consent right over our change of control |

## 6. Escalation and negotiation process

<!-- Guidance: Show the path a contract takes from request to signature. The diagram and the steps must match the tiers in section 3 and the approvers in section 4. -->

```mermaid
flowchart TD
  A["Contract request through legal intake"] --> B{"In playbook scope?"}
  B -->|"No"| L["Route to commercial lawyer as a new matter"]
  B -->|"Yes"| C["Assign tier T0 to T3"]
  C --> D["Review against clause positions"]
  D --> E{"All changes within fallback?"}
  E -->|"Yes"| F["Contract manager approves"]
  E -->|"No"| G{"Within walk-away?"}
  G -->|"Yes"| H["Approver per section 4"]
  G -->|"No"| I["General counsel, and CFO for financial clauses"]
  I -->|"Declined"| J["Return to business with alternatives"]
  H --> K["Record deviation in log"]
  I -->|"Approved"| K
  F --> M["Signature per delegation of authority"]
  K --> M
  M --> N["Contract register and obligations set up"]
```

Steps:

1. **Intake.** The requester submits the request, the draft, the
   counterparty and the deal value through the legal intake channel.
2. **Scope and tier.** The contract manager checks section 2 and sets
   the tier from section 3, including red flags.
3. **Review.** The reviewer compares the draft with section 5 and
   marks up with tracked changes and short external comments.
   Internal reasons stay in the deal record, not in the document sent
   to the counterparty.
4. **Negotiation.** The reviewer offers fallback positions in order,
   never the walk-away first. The business owner joins calls where
   commercial trade-offs are needed.
5. **Approval.** Deviations beyond fallback go to the approver in
   section 4 with a one-paragraph summary: the clause, the ask, the
   proposed answer, the value and the risk.
6. **Signature.** Signatories follow the delegation of authority
   matrix. Legal confirms the final version matches the approved
   version before signature.
7. **Handover.** The signed contract, key dates and obligations go to
   the contract register (`procurement/contract-register`) with an
   owner for each obligation.

## 7. Deviation log and playbook maintenance

<!-- Guidance: The log is the evidence that the playbook works. Review it quarterly and change positions that are approved again and again, or that never come up. -->

### 7.1 Deviation log

| Deviation ID | Date | Deal or counterparty | Clause | Position reached | Approved by | Reason |
|---|---|---|---|---|---|---|
| DEV-2026-001 *(Example)* | 2026-10-12 | Customer A, ACV USD 240,000 | 5.1 General cap | Fallback, 1.5 times annual fees | Contract manager | Competitive tender, customer standard |
| DEV-2026-002 *(Example)* | 2026-10-19 | Customer B, ACV USD 610,000 | 5.5 Breach notice | 48 hours from confirmation | Head of commercial legal | Regulated customer, security team agreed it is achievable |
| DEV-2026-003 *(Example)* | 2026-10-26 | Customer C, ACV USD 90,000 | 5.6 Payment terms | 60 days | Commercial lawyer | Customer policy, finance agreed |

### 7.2 Quarterly review

| Question | Evidence | Outcome |
|---|---|---|
| Which fallbacks were used most often? | Deviation log count by clause | [Move to preferred, or keep] |
| Which walk-aways were crossed, and why? | Approvals by GC and CFO | [Change limit, or keep and brief sales] |
| Did any agreed deviation lead to a dispute or claim? | Matter list, claims register | [Tighten position] |
| Did law or regulation change? | Legal register (`compliance/legal-register`) | [Update clause and template] |
| Is turnaround inside target by tier? | Intake system data | [Adjust tiers or resourcing] |

## 8. Training and access

<!-- Guidance: A playbook used by sales operations or contract managers needs training and access controls. Record who may use which tier. -->

| Audience | Access | Training | Refresh |
|---|---|---|---|
| Contract managers | Full playbook | Initial session plus supervised reviews of [10] contracts | Yearly and on major version |
| Sales operations | Sections 2, 3 and T0 rules | Short session | On major version |
| Commercial lawyers | Full playbook and deviation log | Onboarding | On major version |
| Outside counsel | Sections 5 and 6 for matters they handle | Briefing at engagement (`legal-ops/outside-counsel-guidelines`) | Per engagement |

Keep the playbook confidential: it reveals negotiation limits. Share
it outside the legal team only under the access rules above and mark
it as privileged where your legal system allows.

## 9. Glossary and references

<!-- Guidance: Define the terms a business reviewer may not know. Keep references to laws dated and linked. -->

| Term | Meaning in this playbook |
|---|---|
| ACV | Annual contract value: recurring fees for one contract year |
| Carve-out | A liability excluded from the general cap |
| Fallback | A position a reviewer may agree without escalation beyond the approver named in section 4 |
| Super cap | A separate, higher cap for a named type of liability |
| Walk-away | The limit beyond which the deal needs the top approver or is declined |
| Paper | The contract template used as the starting draft |

| Reference | Edition or date | Use |
|---|---|---|
| Unfair Contract Terms Act 1977 (UK), section 2 | As amended, check the current text on legislation.gov.uk | Example of a liability that cannot be excluded |
| Regulation (EU) 2016/679 (GDPR), Article 28 | Applies from 25 May 2018 | Processor contract terms |
| CLOC Core 12, Firm and Vendor Management and Service Delivery Models | What is Legal Operations guide, August 2020 | Background on legal operations functions |

## Standard and licence note

Based on in-house legal practice for contract playbooks; no published
standard governs this document. The positions, figures and approval
limits are examples, not recommendations, and must be set by the
organisation's own counsel and finance. Laws are named only as dated
EU, UK and US illustrations with links to the official texts; check
the current consolidated versions before use. The organisation and
deals in the example are fictional. All text is original wording
written for this collection. This is a documentation format, not legal
advice; consult a qualified professional.

Template licence: MIT.