In parts 1 and 2 of this blog series, we talked about predictive risk profiling and advanced data analytics, respectively. Continuing with our discussion, this blog post will address another futuristic CLM capability:

Context sensitivity

How do you define context sensitivity for a CLM solution? It is the ability of a CLM to determine what a contract requires, based on its understanding of the context. This understanding drives the CLM to make AI-based suggestions and facilitate quicker authoring of all-inclusive, standardized, error-free contracts.

Most CLM solutions offer template and clause libraries as the basic tools to help build the contract. Next generation CLMs go beyond by deploying AI to ensure that the contract covers all aspects and no pertinent clause goes missing. For example, if the seller is based out of the United States, CLM recognizes and informs that the sales contract should contain a currency fluctuation clause.

There are many other ways in which CLM exhibits context sensitivity. Taking the case of a sales contract consisting of a master and a sub agreement—Suppose the master agreement mentions a warranty of six months whereas the sub-agreement states a warranty of one year. The CLM will point out the mismatch here and ask the author to rectify it. Here’s another example—Say one section of the contract mentions delivery milestones at four months whereas another section has that at three months. The CLM again notifies the author by displaying an error message. In scenarios like this, you observe the level of awareness of the CLM moving from content to context.

Watch this space for more on contracts and contract management. If you have any questions regarding the same, feel free to reach us at

Author Stuti Mehrotra

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