For a long time, reviewing contracts has been a tedious and frustrating process, requiring lawyers to spend hours making minor changes before you could sign them. With the help of natural language processing (NLP), that’s no longer the case.
NLP is a branch of artificial intelligence that enables computers to extract meaning from the human language so contracts can be processed automatically. Here, we’ll go over everything you need to know about NLP for contracts —from why it matters to how BlackBoiler uses it to make life easier for lawyers worldwide.
Challenges in Contract Management
Contracts are a crucial component of every business. They are a legally binding agreement between two or more parties, which helps to define the terms and conditions of a business deal.
Contracts can also define the rights and obligations of the parties involved in any transaction.
One example would be when buying or selling goods or services with another party; there will be an official contract that outlines what you have agreed to do for your partner and what they will do for you in return.
What is NLP?
NLP (natural language processing) is an area of artificial intelligence that deals with understanding, analyzing, and generating human language.
It’s already used in all kinds of applications, from automatic speech recognition to sentiment analysis (a way of determining whether a piece of writing is positive or negative).
You can apply NLP to many areas to solve problems and make systems more efficient. You can also use it in many industries, including healthcare, finance, insurance, and business management. NLP is also popularly used by programmers who want to create chatbots.
In practice, computers have become better at understanding human language than ever before!
Natural Language Processing and Contracts
Contracts are a vital part of the business world. They help ensure that all parties involved understand their responsibilities and obligations. However, contracts can be challenging to understand, especially for people who do not have a legal background.
Natural Language Processing (NLP) is a technology that can help interpret contracts and determine whether they are suitable for use. NLP is used to analyze written text and identify the critical components of that text.
You can use it to analyze contracts to determine whether they contain any issues or problems that you should address before all the parties involved sign the document.
Top companies such as IBM and Microsoft use this technology to improve how they interpret documents such as contracts and other legal documents.
NLP allows these companies to gather data about these documents to create new features or features that will enable them to understand better what they are reading.
Using this type of technology allows companies to provide better services for their clients by providing more information about the content of their contracts. It will enable them to make informed decisions on whether to sign them or not based on what is in the contracts without having to read through everything manually first. Moreover, it would take a much longer time to read through the contracts manually than using an automated system like this.
NLP for Contract Analysis
You can use NLP to analyze contracts by identifying key terms and clauses, sorting them into categories suitable for analysis, and comparing them to similar agreements.
This approach has many benefits. It allows users to focus on the most relevant parts of a contract, enabling them to compare details like dates, times, and locations with other agreements to identify similarities or differences. This is particularly beneficial when analyzing large documents with multiple clauses that may not all be relevant to a particular case or situation.
Additionally, NLP can allow you to compare multiple versions of an agreement at once and highlight areas where there have been changes or additions over time. You can also use it to identify who signed each version of the contract and when they signed it so that you know whether they signed legally binding agreements or just letters sent by lawyers as part of their negotiations process.
NLP for Contract Negotiation
Contract negotiation is a process that involves both parties coming up with terms and conditions of mutual benefits and interests. It can be a lengthy process if not handled properly by the parties involved.
To make this process more efficient and effective, you can use NLP techniques to help both parties reach an agreement satisfactory to both sides.
Emotions such as anger, hatred, and frustration usually follow negotiations, and they could lead to a breakdown in communication between the two parties.
This may result in one party walking away from the table without coming up with an agreement, or worse still, they will agree on terms that favor only one party over another!
NLP can help you identify your own needs and wants and those of your counterpart. It will also help you understand their needs and wants to come up with an agreement that works for both parties.
How BlackBoiler uses NLP to review Contracts
When reviewing a contract, it’s easy to miss essential details in the legal world.
That’s where natural language processing (NLP) comes in.
BlackBoiler is a contract analysis software that uses NLP to review contracts, and we can help you do the same for your company.
We know that contracts are a necessary part of any business—but they can also be a headache. We’ve all been there, waiting for the other party to review the contract and get back to you with edits or questions. But why wait?
Using our NLP technology, we analyze your initial contract draft, looking at clauses that might be disputed and suggesting changes so that you can avoid those disputes altogether.
In addition, we provide insights into what your client is looking for in their contract, which will help you make sure that every clause is tailored to their needs. Doing this saves time for both parties involved in the process, which means less back-and-forth between drafts and more time spent finding out how you can work together.
In short, using NLP for contracts gives you a deeper understanding of what goes on behind the scenes when working with clients—and it helps ensure that your clients are happy with their final product. Contact us today to request a demo!