Contract certification standards.

1. Balanced Or Better Rating

A contract is balanced when it allocates risks between the parties in a roughly equal manner, as determined by TermScout’s two-step, data-driven analysis. First, we use our proprietary AI to abstract over 750 defined data points from each contract we analyze.  Then, we use an algorithm to objectively score that data. Because TermScout looks at the exact same set of data points and uses the exact same scoring algorithm in every contract analysis we conduct, you can now compare contracts on an apples-to-apples basis. (You can read more about the data points that TermScout analyzes in every IT contract here.)

This enables us to objectively rate contracts at both the agreement level and by key topic area (e.g., limitations of liability, indemnification, warranties, etc.) and show you which contracts are vendor favorable, which are customer favorable, and which are balanced.  Here are some examples of what contracts look like that fall into each of these categories.¹

1. Vendor Favorable: Gusto, AppHarbor, AWS
2. Balanced: Oracle, Salesforce, Crossbeam
3. Customer Favorable: Freshworks, Google Cloud, IBM Cloud

2. No Deal Breakers 

Not all risks are created equal.  Even if a contract shifts only a single risk to the buyer, the contract still may not merit certification if that risk is material enough.  Examples of these types of Deal Breakers include exclusivity, complete disclaimers of liability, etc.  Accordingly, TermScout will not certify a contract if it contains any of the following Deal Breaker clauses,² which TermScout identified by reference to market data and input from prominent buy-side and sell-side legal experts from TermScout’s Innovation Advisory Council: