Crafting Effective Guidelines for Detailed VerifAI Playbooks

VerifAI is powered by your guidelines – the rules and principles you set that guide its analysis of contracts. With the introduction of Detailed Guides (including Typical Wording and Fallbacks), well-written guidelines are now more critical than ever to ensure accurate AI suggestions and streamlined negotiation.

What are Guidelines and How are They Measured?

VerifAI analyzes your contract by evaluating it against a set of Guidelines. Think of Guidelines as the definitive "rules of the game" or recommended standards your organization strives to follow in its contracts. They are statements of legal principles that VerifAI uses to evaluate whether a contract meets your organization’s expectations.

Understanding Guideline Status

When VerifAI runs a review, each guideline receives one of three statuses:

Example of a guideline

• Title: Governing Law (NY/CA Fallback)
• Guideline: Ensure that the agreement is governed by the laws of New York and that the state and federal courts in New York City have exclusive jurisdiction.
• Typical Wording (Your Preferred Clause): "This Agreement shall be governed by the laws of the State of New York. The state and federal courts located in New York City shall have exclusive jurisdiction to settle any disputes arising out of or in connection with this Agreement."
• Fallback 1: "This Agreement shall be governed by the laws of the State of California. The state and federal courts located in San Francisco, California shall have exclusive jurisdiction to settle any disputes arising out of or in connection with this Agreement."
• Fallback 2: "This Agreement shall be governed by the laws of the State of Ohio. The courts of Columbus, Ohio shall have exclusive jurisdiction to settle any disputes arising out of or in connection with this Agreement."

1. The Core Principles of Effective Guidelines

These principles apply to the text you enter in the primary Guideline field, which defines the rule the AI must check.

1.1 Guidelines Must Be Action-Oriented

The best guidelines start with action verbs that clearly state what condition must be met or what must be ensured. This provides clear instructions to both the AI and the human reviewer.

1.2 Be Explicit and Avoid Ambiguity

Always name the specific parties rather than using vague pronouns or generic terms. Ambiguous references confuse who holds which obligations.

1.3 Focus on Legal Substance, Not Formatting

Guidelines must describe what the contract must say, not where clauses should appear or how they should be formatted.

1.4 Guidelines Must Be Self-Contained

The AI should be able to evaluate the guideline using the text alone. Never reference the appendix, external exhibits, typical wordings, fallback sections, or require the reviewer to hunt for outside context.

2. Strategy for Detailed Fields

The new guide structure separates the Rule (the Guideline field) from the Language (the Typical Wording and Fallback fields). This separation is the key to creating smart, automated suggestions.

2.1 The Role of Each Field

2.2 Guideline Text Must Distill the Typical Wording

Do not copy and paste your full legal text into the primary Guideline field. The Guideline text should summarize the essence of the requirement contained in the Typical Wording.

2.3 Use Full Legal Text in Language Fields

The Typical Wording and Fallback fields should contain the complete, grammatically and legally correct clause text. This is the text VerifAI will use to generate redlines and suggested edits in the contract document.

3. Structuring Your Playbook for Clarity

3.1 Maintain MECE Coverage (Mutually Exclusive, Collectively Exhaustive)

Ensure your guidelines cover all essential topics without overlapping or creating conflicting instructions.

• Avoid Overlap (Mutually Exclusive): Do not create one guideline that checks "liability and indemnity" and another that checks "indemnity and damages." This can result in the AI generating redundant or contradictory edits to the same clause.
• Ensure Completeness (Collectively Exhaustive): If you cover the overall 'Termination' clause, ensure sub-requirements (e.g., termination for convenience, termination for cause, notice periods) are adequately covered, either within that single guideline (if interdependent) or across multiple, dedicated guidelines (if independent).

3.2 Strategy: When to Split vs. Consolidate Guidelines

Finding the right balance between splitting and consolidating guidelines is essential for two reasons: ensuring comprehensive coverage and preventing the AI from generating conflicting edits (redlines) on the same clause.

When to SPLIT (Creating Multiple Guidelines)

You should split your requirements into separate guidelines when the requirements are logically independent, and the suggested edits for one requirement do not interfere with the others.

Split if:

• Independent Check: The requirements are distinct legal concepts that live in different parts of the contract or are validated independently.
  • Example: Guideline 1: "Ensure that the Governing Law is New York." Guideline 2: "Ensure that the notice period for termination for convenience is 90 days." (These two rules operate on different clauses and cannot conflict.)
• Granular Tracking: You need separate compliance statuses ("Met" or "Not Met") for each specific legal point.

When to CONSOLIDATE (Creating a Single, Complex Guideline)

You must consolidate multiple requirements into one guideline when they describe conditions that modify or pertain to the same physical clause or paragraph in the contract.

Consolidate if:

• Interdependent Elements: The requirements are highly connected and always negotiated as a single unit.
• Risk of Conflicting Redlines (Crucial): If two different guidelines attempt to edit the same sentence or clause, the AI may produce overlapping, messy, or contradictory suggestions. By consolidating them under one rule, you ensure the AI attempts to fix all violations within that rule holistically, using your stored Typical Wording as the single source of truth for the complete clause.

Example of a Consolidation Requirement (Avoiding Conflict)

Consider the standard indemnity clause regarding liability, often a single, dense paragraph:

By consolidating these three points into a single Guideline (e.g., "Ensure the liability clause restricts cap, excludes indirect damages, and limits survival period"), you guide the AI to check the physical clause against the complete, correct language provided in your Typical Wording field, minimizing the risk of conflicting edits.

3.3 Use Numbered Lists for Complex Rules

If your Guideline must contain multiple distinct conditions, use a numbered or lettered list for clarity within the text.

• Good Example: "Ensure that the Recipient must be permitted to retain Confidential Information: (i) to comply with law; (ii) as part of internal records; or (iii) in electronic form where destruction is not practicable."

4. What to Avoid in All Guidelines

Guidelines should be definitive and focused strictly on contract content.