Scenario 02

---
name: review-commercial-contracts-diligence-scenario-02
task_id: corporate-ma/review-commercial-contracts-diligence/scenario-02
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 Acquisition)

## 1. Subject-matter triage

- Confirm the review set: contract schedule, diligence request list, and the underlying commercial agreements.
- Separate the population into customer, vendor/infrastructure, partnership/co-development, reseller/distribution, and services arrangements.
- Treat any contract listed in the schedule but not produced as a production gap requiring follow-up.
- If the source set includes only one contract in a category, say so explicitly before analyzing that category; otherwise enumerate the contracts in that category and review each separately.

## 2. Failure modes the skill is correcting

- Change-of-control provisions are checked in isolation, without first testing whether the contract is material enough to drive consent, disclosure, or closing risk.
- SaaS-specific issues are flattened into generic commercial terms, missing renewal mechanics, termination rights, service levels, data-use restrictions, privacy obligations, and customer audit rights.
- Schedule-to-production mismatches are overlooked, so missing contracts are not surfaced as diligence gaps.
- Partnership and co-development arrangements are reviewed only for assignability, while IP ownership, output rights, and revenue-sharing mechanics are left unanalyzed.
- Vendor and infrastructure agreements are not distinguished from ordinary vendor paper, even though they may contain termination, repricing, or service-continuity risks.
- Findings are described narratively but not tied to the source document set, the interacting clause, and the downstream acquisition consequence.
- Advisory output identifies issues without prioritizing them or pairing them with concrete next steps.

## 3. Legal frameworks / domain conventions that apply

- Commercial diligence for SaaS targets commonly turns on contract category, renewal profile, customer concentration, vendor dependency, and data-handling obligations.
- Customer agreements may include auto-renewal, convenience termination, usage-based pricing, service-credit regimes, audit rights, data-processing addenda, security commitments, and limits on liability.
- Vendor and infrastructure agreements may include assignment or change-of-control restrictions, termination rights, service levels, uptime commitments, and disaster-recovery obligations.
- Partnership and co-development agreements may create joint ownership, restricted use rights, field-of-use limitations, or revenue-sharing obligations that affect IP and commercial representations.
- Review any privacy, security, or data-processing commitments against the applicable contractual text and the agreement set as a whole, including incorporated policies or addenda.
- Where the source documents cite a governing statute, regulation, rule, or doctrine, carry that authority through the analysis rather than stating the consequence in conclusory form.
- In the absence of a cited source authority, use the generally recognized contract-law and diligence conventions applicable to commercial M&A review.

## 4. Analytical scaffolds

- Build a contract tracker from the schedule and request list before assessing substance.
- For each contract reviewed, identify the counterparty category, core commercial function, term, renewal structure, termination rights, assignment/change-of-control language, and any incorporated exhibits or addenda.
- For customer contracts, test whether the renewal profile or termination rights create retention risk, revenue volatility, or closing-period consent needs.
- For SaaS arrangements, test data-processing, confidentiality, security, support, uptime, audit, and service-credit provisions for outlier obligations or operational exposure.
- For partnership and co-development agreements, isolate ownership of pre-existing IP, developed IP, derivative works, outputs, and commercialization rights.
- For vendor and infrastructure agreements, focus on continuity of service, migration rights, pricing reset rights, and any clause that would be triggered by a transaction.
- Compare the schedule against the produced agreements and flag each missing item as a diligence gap.
- For every issue identified, record the severity, the contract or schedule item involved, the interacting clause or document, and the practical effect on the transaction.
- Organize the memo so the reader can move from broad risk themes to contract-level findings without re-reading the source materials.

## 5. Vertical / structural / temporal relationships

- Track contracts by category and then by contract-level risk so that customer, vendor, and partnership issues are not blended together.
- Track timing-sensitive provisions separately: upcoming renewals, notice windows, cure periods, consent triggers, and post-closing repricing or termination rights.
- Track clause interactions within the same agreement and across the source set, especially where an operational commitment, IP allocation, or change-of-control term alters a separate representation or disclosure item.
- Track missing documents as a separate vertical from substantive issues; a contract not produced is a different problem from a contract that is produced but risky.
- If the source documents identify multiple counterparties, periods, or versions, enumerate them first and analyze each one on its own terms.

## 6. Output structure conventions

- Produce a single diligence memorandum in ordinary M&A diligence style.
- Start with an executive summary that states the principal commercial risks, production gaps, and transaction implications.
- Follow with category-based analysis in conventional order: customer contracts, partnership/co-development agreements, vendor/infrastructure agreements, and schedule gaps.
- Within each category, use a uniform issue format: contract name or category, issue description, severity, source basis, interacting provision or document, and transaction consequence.
- Use an ordinal severity scale defined once near the top and apply it consistently throughout the memo.
- End with a concise Recommended Actions section that assigns each action to the appropriate role and ties it to a transaction milestone or near-term diligence deadline.
- Keep the memo self-contained and grounded in the reviewed contracts and request list; do not invent facts, terms, or production status not supported by the source set.
- If the source set cites controlling authority for a proposition, name that authority in the analysis; do not state legal conclusions without the rule or source that supports them.