Every vendor agreement, service contract, and NDA that lands on your desk needs a careful review.
Most business owners can attest to spending several hours each week combing through contracts, so it’s no surprise that many start looking for ways to offload the workload.
Until recently, the standard — and often only — option was to hand contract review over to a lawyer.
But with attorneys spending an average of 92 minutes per contract and charging anywhere from $150 to $500 per hour, the costs add up quickly.
For small businesses that sign multiple agreements each month, getting every contract professionally reviewed just isn’t realistic.
But what if we told you that with AI contract review tools, such as ContractCrab, you can scan contracts in minutes, flag risky clauses, extract key dates and obligations, and receive plain-English, easy-to-understand summaries of what you’re agreeing to — all for as little as $0.15 per contract?
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Contract review is the process of reading through an agreement in a structured way — often using a contract review checklist — before you sign it. The goal is to ensure that:
In the setting of a law firm, this work is done by a paralegal, who examines the document for legal issues and flags potential concerns. The contract is then passed to a senior attorney, who reviews those notes before sending the final version to business executives. That’s how larger companies make sure their contracts are airtight.
Fun fact: Fortune 1000 companies typically manage between 20,000 and 40,000 active contracts at any given time—and many have entire departments dedicated just to keeping everything organized.
Of course, this isn’t realistic for an average small business, yet the risks are practically the same.
Vendor agreements, client contracts, partnership deals, and NDAs all carry significant exposure. For example, an auto-renewal clause can lock you into paying for another term without realizing it, while unlimited liability provisions can spark disputes that give the other party the power to financially cripple your business.
In fact, research by Juro shows that 70% of businesses run into legal issues because their contracts weren’t properly reviewed.
The solution is essentially the same as it is for large enterprises: put a structured contract review process in place. This helps you reliably vet contracts before signing, spot red flags early, and protect the business you’ve worked hard to build.
What does differ is how a small business can realistically implement this. After all, you probably don’t have — or want to pay for — a whole team of lawyers
The good news is that you don't need a law degree to review business contracts.
In fact, by using the method that lawyers use, which starts with the general and narrows down to the specifics, you can identify many red flags yourself.
This is actually very similar to debugging code or editing an article. Here's how to adapt this process to your business:
To be balanced, even with a trained eye, it's possible to overlook red flags without legal knowledge. Not to mention, this entire process can take a long time.
That's where AI tools become very helpful. They can run through the same steps very quickly, finding problems for you to check.
AI contract review tools do three things well: catch errors, flag unusual terms, and extract key information.
Now that we've cleared that up, let's talk about how to use an AI business contract review tool, such as ContractCrab in real life.
When to Use AI Review
It’s a good idea to always use it for standard contracts, as there’s very little downside to it. Standard contracts include but are not limited to:
Notably, these agreements follow a similar template and AI is very good at spotting deviations from these patterns.
To get the most value, use AI review a first pass to spotlight potential issues, and to get a quick summary.
Build a reference library of good contracts
It goes without saying that you should keep your contracts safe and organized. But besides general organization, there’s another reason for this: when AI flags something as unusual, you can quickly check it against your own small database to see if it's actually problematic.
Set a review threshold
Do you ever need to hire a lawyer? It depends on your risk tolerance, but one logical approach is to set a threshold based on the contract's value.
AI contract review service is still a fairly new field, and the first tools to enter the market — like Spellbook and Legartis — were built for lawyers, not business owners. While you could use them, you’d end up overpaying for features you probably wouldn’t use, and ultimately getting less value.
When choosing a tool, pay attention to:
If it offers a free trial or a money-back guarantee, upload a real contract you’ve already reviewed manually and check whether the AI flags the issues you already know are there.
It can seem like generative AI chatbots such as ChatGPT can replace specialized AI tools — but they can’t.
There are several reasons why:
In short: don’t use ChatGPT to review contracts. The risk of mistakes is high, and those mistakes can have serious consequences.
In the US, lawyers charge between $150 and $500 for one hour of contract review.
On average, a contract review lasts 90 minutes.
This means that using a lawyer for contract review could cost between $225 and $750 per contract. Overall, contract review software can cost as little as $0.15. per contract. It is just as accurate and thorough as many lawyers.
