Setting Up Contract Risk Scoring on SpotDraft

Overview

SpotDraft lets you define automated risk scores directly on contracts — no manual spreadsheets or offline tracking required. Risk scoring works by combining two capabilities built into the platform:

1. Metadata fields — structured data attached to a contract (e.g., liability cap, vendor type, annual spend)

2. Computations — formulas that read those metadata values and produce a derived result, such as a risk level

Together, these allow you to express rules like:

• "If liability is above $10M, mark this contract High Risk; between $1M and $10M, Medium Risk; below $1M, Low Risk."

And then go further:

• "If more than five individual risk indicators are flagged as High, set the overall Net Risk Level to High."

Step 1: Define Your Risk Criteria as Metadata Fields

Before you can score a contract, you need to capture the raw data that feeds the scoring logic. This is done using metadata fields on your contract template.

Examples of source metadata you might configure:

Metadata fields can be:

• Filled in by a user during the contract creation flow (intake questions)

• Extracted automatically from the contract document using Smart Data Capture (SDC) — SpotDraft's AI-powered clause extraction feature

SDC works on both new contracts and historical ones via a bulk re-extraction run. This can be used to calculate risks for historical contracts as well.

Step 2: Set Up Individual Risk Level Fields Using Computations

Once source data is available, our implementation team can help configure a Computation for each risk dimension you want to score. A computation is a formula that evaluates metadata values and writes a result — such as "High", "Medium", or "Low" — into a separate metadata field.

How the logic works (plain English):

For a field like Liability Risk Level, your formula would say:

• If the liability cap is above $10M → output "High"

• If between $1M and $10M → output "Medium"

• If below $1M → output "Low"

Note: They can depend on each other — SpotDraft resolves nested dependencies automatically in the correct order

Step 3: Set Up a Net (Aggregate) Risk Score

Once individual risk level fields exist, our implementation team can create a Net Risk Level computation that rolls them all up.

Example rule: "If 5 or more of the individual risk fields are High, the Net Risk Level is High; if 2 or more are High, it is Medium; otherwise, it is Low."

Net Risk Level could be computed by adding a value for every 'High' individual risk, and a net score decides contract level aggregated risk.

This means:

• You can have as many scoring layers as you need

• Each layer can reference any combination of upstream fields

• The final Net Risk Level field is always re-evaluated whenever an upstream value changes (see note below on re-evaluation)

Step 4: How Values Update Over Time

A common question is: "If I update a source metadata field after the contract is saved, does the risk score update automatically?"

The answer depends on the trigger:

For historical contracts, SpotDraft supports bulk Smart Data Capture — a single action that runs AI extraction across a large set of existing contracts and populates metadata at scale. Once extraction completes, computations can be re-evaluated across that same set.

Step 5: Surface Risk Scores in Reports and Dashboards

Once the risk fields are computed and stored as metadata, they become first-class searchable and reportable fields across SpotDraft:

• Repository search and filters — filter contracts by risk tier (e.g., show all "High" liability risk)

• Custom Dashboards — build a dashboard that shows how many contracts fall into each risk category, with drill-down by contract type, department, or workflow

• Exports — download a CSV of all contracts with their risk levels for offline analysis or leadership reporting

The risk score field behaves exactly like any other metadata field — it can be included in custom views, exported in bulk, and used as a filter in saved searches.

Summary of Capabilities

Frequently Asked Questions

• Can I score both new contracts and old ones?
  Yes. Smart Data Capture can run on historical contracts in bulk, extracting the fields needed to compute risk scores retroactively.

• Can a risk score trigger a workflow or approval step?
  Risk metadata fields cannot be used as conditions in approval workflows. This capability is slated to come soon.

• What happens if a source field is left blank?
  Formulas can account for null/empty values. You can configure a default treatment (e.g., a missing compliance certificate defaults to a penalty score) so blank fields don't silently produce incorrect results.