To an untrained eye, a contract is an unintelligible conglomerate of terms, dates, parties, and (of course) obligations. To be fair, even a trained eye can struggle to sift through and extract the most valuable information from a contract.
Out of all of these components of a contract, the obligation is arguably the most important. Unfortunately, obligations can be easily overlooked. Mistakes frequently occur when a legal department is required to review a swath of lengthy contracts in a short time period — like during a due diligence process following an M&A.
Traditionally, contractual obligations have been extracted manually and summed up in an Excel spreadsheet or Word document, but as the volume of contracts rises, so does the likelihood of mistakes and omissions. This leads to contract non-compliance (which results in disputes, terminations, and penalties).
If only a more efficient, resource-friendly solution existed to extract obligations…
Enters Obligation Extraction
Cognitiv+ is trained to recognize the obligations included in a document, automatically extracting them and assigning a colour based on their severity: high, medium, or low. Think of it as a traffic light system for deliverables!
The list of obligations can be extracted into a Word document or an Excel file that provides a list of clauses containing obligations, a summarised version, their severity, the timeframe as well as the category they belong to: deliverable, obligation, discretion, or prohibition. Cognitiv+ is trained to automatically recognise all obligations within a contract, but the user can add more obligations manually through a simple and intuitive annotation system.