Use Case | Semantic Searches in Contracts

Use Case: Semantic Searches in Contracts

General Description:
Semantic searches in contracts allow for quick location of specific clauses in lengthy documents through contextual queries, based on the meaning of the text rather than just exact keywords. A model that organizes information into topics and uses vector databases can automatically analyze contracts, segment them into relevant clauses, and enable precise and meaningful searches. This approach facilitates the review, auditing, and renegotiation of contracts in an agile and efficient manner.

How It Works:

1. Uploading Contracts in PDF:
   Users upload lengthy contracts to the system, which may include supply agreements, leases, sales contracts, transportation agreements, and more.
2. Document Processing:

• The model automatically segments the contracts into sections such as:
  • Payment clauses
  • Delivery conditions
  • Dispute resolution
  • Warranties and penalties
• Each segment is assigned a semantic representation to facilitate searches based on meaning.

1. Contextual Search:

• Users perform queries such as:
  • “What does the contract say about the delivery timeline?”
  • “Penalties for late payment.”
  • “Clauses related to quality guarantees.”
• The system returns the most relevant clauses, highlighting their location and context within the contract.

1. Summary Generation:

• The results are presented in the form of summaries that highlight key points, making them easier to understand and analyze.

1. Integration with Translation and Correction:

• If necessary, the clauses are translated into the required language or corrected before being stored.

1. Storage and Easy Queries:

• Processed contracts are stored in a vector database, enabling quick searches across multiple documents.

Practical Example:
Scenario:
A company needs to review specific clauses in 50 supply contracts to assess payment terms, guarantees, and penalties before renegotiating the agreements.
Process with the Model:

1. Document Upload:
   Contracts are uploaded to the system in PDF format.
2. Model Segmentation:

• The system automatically divides the contracts into topics such as:
  • Delivery timelines
  • Penalties
  • Quality guarantees

1. Semantic Search:

• An analyst queries:
  • “What penalties apply for delivery delays?”
• The system responds with relevant clauses from the contracts:
  • Contract 1: “The supplier will be fined 2% of the total amount for each day of delay.”
  • Contract 2: “The penalty for delay will be a 5% discount on the final invoice.”

1. Summary Generation:

• For each contract, the system generates a summary that includes:
  • Payment terms
  • Penalties for non-compliance
  • Guarantees offered

1. Output:

• The team receives a consolidated report that facilitates comparison between contracts and highlights key areas for negotiation.

Benefits of the Model in Semantic Searches in Contracts:

1. Accurate and Fast Localization:

• Finds specific clauses in long contracts without the need to read them entirely.

1. Contextual Analysis:

• Understands the meaning of queries, providing relevant results even if the phrasing varies across contracts.

1. Structured Report Generation:

• Provides clear summaries of the found clauses, improving the understanding of contractual terms.

1. Integrated Translation and Correction:

• Translates and corrects clauses to facilitate analysis in multilingual environments.

1. Organization and Scalability:

• Stores segmented contracts in vector databases, enabling fast searches across hundreds or thousands of documents.

Additional Applications:

1. Contract Audits:

• Verifies compliance with key terms such as deadlines and legal obligations.

1. Contract Comparison:

• Facilitates comparison of similar clauses across different contracts to detect inconsistencies or areas for improvement.

1. Renewal Management:

• Helps identify critical terms that need renegotiation before renewing agreements.

1. Regulatory Compliance:

• Searches for specific clauses related to local or international regulations to ensure conformity.

Practical Example:
Additional Scenario:
A law firm needs to review 100 lease contracts to identify clauses related to rent increases and automatic renewals.
Without the Model:

• Lawyers spend weeks manually reviewing the contracts, searching for specific terms across hundreds of pages.
  With the Model:
• The system automatically analyzes the contracts, highlighting relevant clauses such as:
  • Contract 1: “The rent increase will be 3% annually starting from the second year.”
  • Contract 2: “Automatic renewal upon expiration unless a 60-day prior notice is given.”

Conclusion:
Semantic search in contracts transforms the way organizations handle and analyze lengthy legal documents. This model not only enables the quick and precise location of specific clauses but also organizes information into clear topics, generates summaries, and facilitates informed decision-making. It is ideal for companies, lawyers, and managers looking to maximize efficiency and accuracy in contract review and management.