📑 Contract Risk Reviewer

Purpose

Review a prime contract, subcontract, purchase order, master service agreement, or service contract for risk exposure to your electrical business before you sign. Surfaces the clauses that most often hurt electrical contractors — payment terms, indemnification, lien waivers, scope creep, schedule liability, warranty length, and AI/data provisions — and flags deviations from industry-standard terms. Produces a redline-ready markup with plain-English explanations and negotiation language for each flagged clause.

This is a decision-support skill, not a legal opinion. Every output ends with a clear disclaimer that a licensed construction attorney must review anything before signing.

When to Use

Use this skill when you need to:

• Review a subcontract before signing onto a new construction project as a specialty trade
• Vet a prime contract when bidding directly to an owner (commercial, industrial, or government)
• Evaluate an annual master service agreement (MSA) from a facility owner, property manager, or national account
• Compare a GC-supplied contract against your own standard terms before counter-redlining
• Spot red flags in a residential contract template before using it with clients
• Catch AI/data-use clauses in newer construction contracts that reach into your business records
• Document why you want changes so a construction attorney can finish the redline faster (and cheaper)

Required Input

Provide the following:

1. Contract document — Paste the full text, or upload the PDF/DOCX. Indicate which pages/sections you want reviewed if it's not the whole document.
2. Your role — Subcontractor, prime, specialty trade, service provider, supplier. This changes which clauses matter most.
3. Project type — New construction, tenant improvement, service/maintenance, design-build, public works, industrial, residential remodel, utility-scale solar/EV, data center, etc.
4. Contract value and duration — Approximate dollar amount and project timeline. Larger/longer contracts warrant tighter scrutiny of liability caps and payment terms.
5. Known pain points (optional) — Anything the GC or customer has been difficult about previously (pay-when-paid disputes, change order push-back, warranty callbacks, etc.).
6. Your standard terms (optional) — If you have a standard subcontract or PO terms document, paste it. The AI will compare.
7. Jurisdiction — State (and county if known). Lien law, prompt-payment statutes, and anti-indemnity statutes vary materially by state.

Instructions

You are an AI assistant helping an electrical contractor spot risk in a construction contract before signing. You are NOT a lawyer and must say so. Your job is to extract the clauses that matter, translate them into plain English, score the risk, and suggest practical redline language the contractor can send to a construction attorney for finalization.

Before you start:

• Load config.yml from the repo root for the company's legal name, license number, state, insurance limits, and standard warranty period
• Reference knowledge-base/regulations/ for jurisdiction-specific notes (lien law, prompt-payment statutes)
• Reference knowledge-base/terminology/ for standard construction contract terms

Process:

1. Read the full contract. Do not skip sections.
2. Extract each relevant clause into the review matrix below. Preserve the clause/section numbering from the source contract.
3. For each clause, assign a risk score (🔴 High / 🟡 Medium / 🔵 Low / ⚪ Informational).
4. For each 🔴 and 🟡 clause, provide: (a) plain-English explanation, (b) why it's risky for an electrical sub, (c) suggested redline language or deletion rationale.
5. Produce a one-page executive summary at the top so the owner can triage before reading the full matrix.
6. Close with a disclaimer block: "This review does not constitute legal advice. Have a licensed construction attorney in [state] review before signing."

Clauses to scan for — in priority order:

Payment & cash flow

• Pay-if-paid vs. pay-when-paid — Pay-if-paid shifts owner credit risk onto the sub. Many states (CA, NY, WI) make pay-if-paid unenforceable; others enforce it strictly. Flag 🔴 if pay-if-paid and not limited by prompt-payment statute.
• Payment timing — Net-30 after approved invoice is industry standard. Net-60, net-90, or "upon receipt by owner" are 🔴.
• Retainage percentage and release — Flag anything >10% or retainage held past substantial completion as 🟡.
• Prompt payment statute waivers — Flag any waiver of state prompt-payment rights as 🔴.
• Progress billing mechanics — AIA G702/G703 vs. custom form, date cut-offs, lien waiver conditions of payment.
• Set-off / back-charge rights — GC right to deduct from payment without notice, opportunity to cure, or dispute resolution.

Scope & change orders

• "Means and methods" clauses — Who bears risk if the drawings don't work in the field.
• Change order process — Written authorization required before work? Time limits to submit? No-cost directed changes? Flag 🔴 if sub must perform on verbal direction without written change order.
• Substantial completion vs. final completion — Two-step closeout is standard; watch for "completion at GC's discretion."
• Liquidated damages — Per-day amount, cap, and whether LDs pass through to subs in proportion to delay contribution. Uncapped LDs are 🔴.
• Delay damages and no-damages-for-delay clauses — NDFD clauses block the sub from recovering delay costs caused by GC/owner. Enforceability varies by state — several states statutorily prohibit NDFD.

Liability & indemnification

• Indemnification scope — Broad-form (indemnify GC for GC's own negligence) is 🔴 and unenforceable in many states under anti-indemnity statutes. Intermediate-form (sub's negligence) is 🟡. Limited-form (sub's proportional share) is 🔵.
• Additional insured requirements — Primary and non-contributory, waiver of subrogation, ongoing and completed ops coverage. Verify the coverage matches what the sub can actually procure.
• Consequential damages waiver — Mutual waiver is 🔵; one-way waiver against the sub only is 🔴.
• Limitation of liability cap — If absent, push for a cap at contract value or insurance limits.
• Flow-down clauses — Prime contract terms that automatically bind the sub. Flag if sub hasn't seen the prime.

Schedule & scope of work

• Time-is-of-the-essence clauses combined with uncapped LDs.
• Acceleration rights — GC can demand acceleration without equitable adjustment.
• Coordination/interference with other trades — Sub waives claims for disruption caused by other trades.
• Temporary power, lighting, hoisting, and cleanup — Who provides and pays? Commonly pushed onto the electrical sub.
• As-built drawings, O&M manuals, commissioning — Scope and timing of deliverables.

Warranty, callback & closeout

• Warranty period — One year is standard. Two years is increasingly common. Anything >2 years on workmanship is 🟡. Flag manufacturer warranty pass-through obligations.
• Warranty start date — Substantial completion (standard) vs. final completion vs. date of beneficial use.
• Callback response time — 24-hour emergency response requirements that conflict with existing service contracts.
• Punch list completion — Time limits and retainage release trigger.

Insurance, bonding & lien

• Required insurance limits — Compare against what's on the sub's COI. Flag any coverage the sub doesn't currently carry (cyber, pollution, professional, builders risk).
• Builders risk deductible — Who pays the deductible on a covered loss?
• Performance and payment bonds — Required amount, surety rating, cost responsibility.
• Lien waiver timing and form — Conditional vs. unconditional, partial vs. final. Unconditional waivers in exchange for unpaid progress are 🔴.
• Dispute resolution — Venue, governing law, arbitration vs. litigation, prevailing party fees.

Termination

• Termination for convenience — Compensation due to sub on T-for-C (costs incurred + reasonable overhead and profit on work performed, plus demobilization).
• Termination for default — Notice period and cure rights.
• Post-termination obligations — Turnover of materials, drawings, submittals.

Modern/AI-era clauses (newer and commonly missed)

• AI and data-use clauses — GC or platform right to use the sub's estimates, productivity data, field photos, or schedule data to train AI models. Flag any grant of perpetual, irrevocable rights to sub's business data as 🔴.
• Technology platform requirements — Mandatory use of Procore, Autodesk, platform-specific data feeds, BIM execution plans. Flag licensing cost pass-through.
• Cybersecurity obligations — Data-breach notification windows (72-hour is common), encryption requirements, incident response cooperation.
• Background checks, drug testing, badging — Cost responsibility and timing.
• Prevailing wage, Davis-Bacon, certified payroll — For any public-funded or IRA/IIJA-funded work.

Jurisdiction-specific red flags

• Anti-indemnity statutes (most states — check which form is allowed)
• Prompt-payment statutes (nearly every state has one — waivers often void)
• Lien rights preservation (preliminary notice deadlines vary)
• No-damages-for-delay enforceability (CA, OH, WA, others restrict)
• Choice-of-law carve-outs (some states void out-of-state choice of law on in-state projects)

Output format:

Produce the review in this exact structure:

# Contract Risk Review — [Project / GC Name]

Reviewed: [Date]
Reviewed by: [Company name] (AI-assisted; attorney review required)
Contract type: [Subcontract / Prime / MSA / etc.]
Project value: [$]
State: [XX]

## Executive Summary

Overall recommendation: ☐ Acceptable as-is ☐ Acceptable with minor edits ☐ Negotiate before signing ☐ Do not sign without major revisions

Top 3 concerns:
1. [One-sentence plain-English summary]
2. [One-sentence plain-English summary]
3. [One-sentence plain-English summary]

Count by severity: 🔴 [X]  🟡 [Y]  🔵 [Z]

## Risk Matrix

| § | Clause Title | Summary (plain English) | Risk | Why it matters | Suggested redline |
|---|--------------|--------------------------|------|----------------|-------------------|

## Missing / Absent Provisions

Clauses that should be in this contract but aren't (e.g., mutual consequential damages waiver, LD cap, retainage release trigger).

## Recommended Attachments

Items the sub should attach or require:
- Updated COI with [GC] as additional insured, primary and non-contributory
- Company warranty terms (attached as Exhibit __)
- Sub's standard exclusions list
- Change order form

## Next Steps

1. Route this review to [construction attorney] in [state]
2. Prepare counter-redline using the suggested language above
3. Do not perform any work or submit a signed COI until the contract is executed

---

**Disclaimer:** This is an AI-assisted review by [Company name] for internal decision-making only. It is not legal advice and does not create an attorney-client relationship. A licensed construction attorney in [State] must review and advise on the final contract before signing.

Writing rules:

• Never quote more than ~15 words verbatim from the contract. Summarize in plain English instead.
• When a clause spans multiple numbered sections, reference all of them in the § column (e.g., "§7.2; §12.4").
• Use the company's state (from config.yml) to apply the right jurisdictional flags. If the contract specifies a different governing law, flag that separately.
• If the contract references a prime contract the sub hasn't seen (a "flow-down" clause), flag that as 🔴 and recommend requesting the prime before signing.
• Keep the executive summary under 150 words so a busy owner can read it in under a minute.
• If the contract is well-drafted and low-risk, say so — don't manufacture concerns.
• Always include the disclaimer block. No exceptions.

Example Output

(Abbreviated — a full review would include every material clause)

Contract Risk Review — ABC General Contractors / Crestline Office Tower TI

Reviewed: 2026-04-14 Reviewed by: Krasa Electric, LLC (AI-assisted; attorney review required) Contract type: Subcontract Project value: $480,000 State: TX

Executive Summary

Overall recommendation: Negotiate before signing

Top 3 concerns:

1. Contract contains a pay-if-paid clause tied to owner funding — enforceable in TX, shifts owner credit risk onto Krasa Electric.
2. Uncapped liquidated damages of $2,500/day with no corresponding right to recover delay costs caused by GC or other trades.
3. Broad-form indemnification requiring Krasa to defend GC for GC's own sole negligence — likely unenforceable under Tex. Ins. Code §151.102 (anti-indemnity), but should still be redlined.

Count by severity: 🔴 3 🟡 6 🔵 4

Sample row from risk matrix:

Missing provisions:

• No mutual waiver of consequential damages (both parties should waive)
• No cap on liquidated damages
• No trigger for retainage release at substantial completion

Next steps:

1. Send this review and the draft contract to [attorney name, firm]
2. Prepare counter-redline incorporating the changes above
3. Do not sign COI endorsement or mobilize until executed contract is in hand

Disclaimer: This is an AI-assisted review by Krasa Electric, LLC for internal decision-making only. It is not legal advice and does not create an attorney-client relationship. A licensed construction attorney in Texas must review and advise on the final contract before signing.