Scenario 01

---
name: review-commercial-contracts-diligence-scenario-01
task_id: corporate-ma/review-commercial-contracts-diligence/scenario-01
description: Guides preparation of a commercial contracts diligence memo for a SaaS target acquisition where customer contracts, vendor agreements, and partnership arrangements must be systematically assessed for material risks.
activates_for: [planner, solver, checker]
---

# Skill: Commercial Contracts Due Diligence Review (SaaS Target)

## 1. Subject-matter triage
- Treat the contract schedule and diligence request list as the scope anchor; identify the contract universe before analyzing any individual agreement.
- Separate the review by contract family: customer-facing agreements, partner / co-development arrangements, vendor / infrastructure contracts, and any gap items listed but not produced.
- If the source set contains multiple execution versions, amendments, or order forms for the same relationship, assess them together as one commercial arrangement and note the operative hierarchy.
- If only one agreement type is present, state that expressly and explain why the remaining categories are not implicated.

## 2. Failure modes the skill is correcting
- Change-of-control review is performed in isolation, without first testing whether the agreement is within the material-contract population used in the acquisition materials.
- SaaS diligence overlooks recurring operational risks such as auto-renewal, termination mechanics, service-level commitments, data-handling terms, audit rights, and support obligations.
- Contracts identified in the schedule are not reconciled against the produced file set, leaving missing items, partial productions, or uncaptured amendments unflagged.
- Partnership or co-development terms are reviewed only for assignment restrictions, while intellectual-property allocation, joint development rights, and revenue-sharing consequences are missed.
- Vendor review stops at ordinary assignment language and fails to flag critical infrastructure dependencies, termination leverage, or re-pricing rights on a control change.
- Findings are described narratively without a clear severity judgment, cross-reference to the operative documents, or downstream transaction consequence.

## 3. Legal frameworks / domain conventions that apply
- Commercial contract diligence in an M&A setting should map each agreement to its business role, then test for assignment, change-of-control, termination, exclusivity, renewal, data-processing, confidentiality, IP ownership, and audit provisions.
- SaaS customer agreements commonly raise issues under data protection and privacy regimes, service-level commitments, and customer-data rights; where the documents invoke a specific regime, cite that regime as written.
- Co-development and partnership agreements may affect ownership of developed technology, derivative works, improvements, source code, and commercialization rights; those terms inform the target’s IP ownership and non-infringement posture.
- Vendor and infrastructure agreements often matter most where they support core product delivery or hosted operations; change-of-control, service continuity, suspension, and termination rights are commercially material even when they are not labeled as such.
- Renewal and termination provisions should be assessed together with notice timing, auto-renewal mechanics, and any unilateral convenience termination right.
- When a source document or schedule identifies a governing rule, standard, or statutory reference, cite it by name and section; do not restate a legal conclusion without tying it to the controlling authority or contractual provision.

## 4. Analytical scaffolds
- Build a contract inventory from the schedule and request list, then reconcile it to the production set.
- For each agreement, identify:
  - agreement type and counterparty function;
  - term, renewal, and termination mechanics;
  - assignment and change-of-control restrictions;
  - service levels, credits, uptime, support, or exclusivity commitments;
  - data-processing, privacy, confidentiality, and audit obligations;
  - IP ownership, work-made-for-hire concepts, and rights in customer data or outputs;
  - any revenue-sharing, referral, reseller, escrow, or continuity provisions.
- For customer contracts, assess whether material obligations could be triggered by a transaction, service disruption, or nonperformance event.
- For partner and co-development agreements, assess whether the arrangement creates shared ownership, implied licenses, commercialization limits, or royalty / revenue-sharing burdens.
- For vendor and infrastructure agreements, assess whether a control change, assignment, or service transfer could cause consent needs, pricing changes, or termination risk.
- For each issue, state the scale of the issue using facts from the source documents, cross-reference the relevant related provisions or related agreements, and explain the transaction consequence.
- Use a consistent severity scale across the memo, such as Critical / High / Medium / Low, and apply it uniformly.
- If the source set contains multiple contracts in the same category, analyze each one separately rather than collapsing them into a single representative finding.
- If the source set lacks a document needed to evaluate a listed contract, treat the absence itself as a finding and identify the specific follow-up needed.

## 5. Vertical / structural / temporal relationships
- Track how one clause changes the effect of another: for example, a broad assignment restriction may be softened by a consent carve-out, while an auto-renewal may magnify the practical effect of a notice deadline.
- Treat amendments, exhibits, order forms, statements of work, addenda, and schedules as potentially controlling over boilerplate.
- Where obligations evolve over time, note the operative trigger date, renewal window, notice period, or post-termination survival period.
- Distinguish between signing, closing, and post-closing consequences; identify whether a consent is needed before closing, after closing, or only upon later transfer or integration.
- If the contract structure includes multiple linked documents, explain the vertical relationship among them and which document governs on the point at issue.

## 6. Output structure conventions
- Produce a single commercial contracts diligence memorandum as the final deliverable.
- Open with a concise executive summary that identifies the most material risks and the overall diligence posture.
- Use an issue-driven organization by contract family, followed by a discrete section for gaps in production or schedule reconciliation.
- For each issue entry, include:
  - a severity label from the stated ordinal scale;
  - the contract or document family;
  - a short issue statement;
  - the factual basis from the reviewed materials;
  - the related clause, schedule, amendment, or companion document;
  - the consequence for the transaction or business;
  - a short recommendation tied to the responsible role and timing.
- End with a Recommended Actions section that gives imperative next steps, identifies the responsible role where available from the source set, and ties each step to the signing / closing / diligence milestone or another source-based timing anchor.
- Keep the prose concise, but complete enough that each issue can be understood without referring back to the source documents.