Contract review checklist for procurement approval

Nothing here is legal advice. A draft is a starting point for a qualified person, not a substitute for one.

Use this workflow to turn a supplier's draft contract and procurement's requirements into a review checklist that can support an approval decision. It is for routine supplier agreements where in-house legal and legal operations need a clear handover, not an unsupervised legal conclusion.

Nothing here is legal advice. The checklist is a draft work product. A qualified person must decide the legal position, negotiation approach and approval outcome.

1. Open a matter record

Create one review record before reading the contract. Use a shared matter workspace, not a chat thread, so the checklist, source documents and final decision remain together.

Record these fields:

• Supplier legal name and contracting entity.
• Internal customer and contract owner.
• Contract type, such as software subscription, consultancy, managed service or goods supply.
• Contract documents received, including the main agreement, order form, statement of work, policies and any supplier terms incorporated by link.
• Procurement requirements, including scope, term, spend owner, renewal expectation, implementation date and business dependencies.
• Data and security facts, including whether personal data, confidential business data or regulated data will be handled.
• Review deadline and approvers.
• Existing agreement status, if this is a renewal, replacement or variation.

Ask procurement to confirm missing facts before starting clause analysis. Do not assume that a standard supplier agreement is low risk because the supplier calls it standard.

2. Set the checklist headings

Build the checklist from the procurement brief first, then map contract clauses to it. This stops the review becoming a list of clause summaries with no approval purpose.

Use these columns in the checklist:

Field	What to enter
Topic	The issue being reviewed, such as liability cap or renewal
Contract reference	Clause number, schedule and page reference
Supplier position	A short, accurate summary of the drafting
Requirement	The internal requirement or approved fallback
Decision	Accept, Query or Escalate
Action and owner	The proposed question, amendment or internal decision owner

Include headings appropriate to the agreement. A routine supplier review will often need:

• parties, authority and contract hierarchy
• scope, deliverables, service levels and acceptance
• fees, taxes, invoicing and price changes
• term, renewal, suspension and termination
• confidentiality and publicity
• data processing, security, audit and incident notification
• intellectual property, licences and use of outputs
• warranties, indemnities and exclusions
• liability cap and insurance
• compliance commitments and subcontracting
• dispute process, governing law and notices
• operational dependencies, implementation and transition support

The scope of automated drafting and available features can vary. Check the current xAI documentation overview before standardising a team process around a particular capability.

3. Give the model controlled source material

Provide the supplier contract and procurement requirements in clearly labelled sections. If the agreement is long, work document by document or section by section, while preserving clause references.

Use a prompt like this:

Create a contract review checklist from the materials below.

Contract type: [type]
Internal customer: [team]
Procurement requirements: [paste confirmed requirements]
Risk rules: [paste your approved internal playbook or fallback positions]
Supplier contract: [paste text or attach document]

For each relevant topic, return:
1. topic;
2. exact contract clause reference;
3. short supplier position, without adding terms not in the text;
4. relevant procurement requirement or risk rule;
5. decision: Accept, Query or Escalate;
6. reason for the decision;
7. proposed question or amendment, where needed;
8. missing information needed from procurement or the supplier.

Mark any uncertainty as "Not confirmed". Do not give legal advice or make the approval decision.

Use your own approved playbook as the source for requirements and fallbacks. Do not ask the model to invent a market-standard position. If there is no internal rule, the correct output is Escalate or Not confirmed, with the decision owner named.

4. Classify each item

Apply the three decisions consistently. The label records the next action. It does not determine legal risk on its own.

If the clause...	Mark it	Next action
Meets the confirmed requirement and contains no unresolved dependency	Accept	Record why it meets the requirement
Needs clarification, a narrow change or missing factual confirmation	Query	Draft a specific question or proposed amendment
Conflicts with an internal rule, creates material uncertainty or needs authorised risk acceptance	Escalate	Name the issue, decision needed and approver

For each Escalate item, state the consequence in operational terms. For example, identify what service could stop, what data use remains unclear, or what financial exposure needs a business owner to accept. Avoid labels such as “high risk” without the clause, fact and decision needed.

5. Check the draft against the source

This is the step that prevents a fluent checklist becoming an inaccurate one. Read every clause reference in the source document. Check that the quoted position has not reversed an exception, missed a defined term or treated a supplier policy as an attachment when it is only linked online.

The output is likely wrong when you see any of these signs:

• A checklist item has no clause number, schedule reference or source location.
• It says a right or obligation exists, but you cannot find the words in the contract.
• A conclusion depends on facts procurement never confirmed, such as data categories, go-live date or annual spend.
• The model has called a clause acceptable without comparing it to a stated internal requirement.
• Defined terms, exclusions, liability carve-outs or order-of-precedence wording are summarised as though they were standalone clauses.
• The checklist omits a document incorporated by reference.

6. Run the internal handover

Put the completed checklist into the approval record with the supplier draft and procurement brief. Then route only the decisions each person owns.

• Send Query items to the contract negotiator or procurement contact, with the exact requested response.
• Send Escalate items to the named legal reviewer, privacy, security, finance or business approver, as applicable.
• Send procurement a short summary of accepted points, open questions, dependencies and the approval deadline.
• Record each response against the original checklist row. Do not replace the original supplier position with the negotiated wording without retaining the change history.

Before approval, update the checklist from the final agreed draft, not from an earlier redline. Confirm that all escalations have a recorded decision, any conditions are reflected in the contract documents, and the correct version is attached to the matter record.

When the workflow does not work

Stop and narrow the task if the documents conflict, the supplier terms change during review, or procurement cannot confirm the business facts. Create a list of missing information and unresolved decisions rather than forcing an Accept or Query label.

If the agreement is unusual, high-impact or outside the team's approved playbook, send the contract, checklist and source references to the qualified reviewer for a fresh assessment. The checklist should make that review faster. It should not replace it.