How to summarise a contract using AI?

What is the purpose of the contract summary?

In a forty-page supply contract, what the owner needs to know often fits on one page: parties, duration, payment terms, termination notice, penalty clauses, and renewal clause. The summary provides this information without opening the document.

The real value of the summary emerges when working with many documents in a folder. Instead of opening each document individually to find out when a contract expires or which ones auto-renew, viewing the summaries is sufficient.

What should a good contract summary include?

• "Parties and subject: who, to whom, committing for what.
• "Duration and dates: start, end, notification, and renewal dates.
• "Financial terms: amount, payment due date, late interest.
• "Obligations: tasks each party must fulfill.
• "Notable clauses: risk-bearing provisions such as penalty clauses, limitation of liability, confidentiality, and unilateral termination rights.

How much should you trust the AI summary?

The AI summary provides a quick first read. It accurately captures the overall structure and key points of the document, but does not provide legal interpretation of any point nor know anything not written in the document. Therefore, the summary should be used to answer the question: “Do I need to read this document, and which points should I look at?”

Decisions on signatures, termination, or disputes are based on the summary, but the relevant clause is read from the full text. It is good practice to check its location in the document before deciding if you see a date or amount in the summary.

How does asking questions about a document differ from summarising it?

The summary document provides a general overview; a question seeks a single detail. Questions such as “How many days before must termination notice be given?” or “Is there a penalty for delay?” are answered based on the document’s content when directed directly at the document.

The same question can be asked for an entire folder: e.g., “Which contracts in this folder expire in 2026?” This saves significant time when comparisons are needed among many documents.

How is the use of AI restricted in hidden documents?

Not every document may need to be read by AI. The organisation should be able to disable AI entirely or restrict it to specific areas and users. Monitoring usage monthly helps keep costs and scope under control.

Example: what can be learned from a contract summary?

Consider a 32-page storage contract with a logistics firm. The first section of the summary gives the subject, parties, and duration of the contract in a few sentences. The key points section lists the monthly fee, price increase condition, and payment due date. The structure section shows which headings make up the document, making it easier to find where the searched item is located.

The notable details section is the most valuable part: for example, it highlights that the contract will extend for one year if written notice is not given sixty days before the end of the term, or that liability in case of damage is limited to a specific amount. This information may have slipped the mind of the person signing the contract; the summary reminds them of it every time it is read.

What are common mistakes made when summarising contracts?

• "Reviewing the summary before signing: The summary is a roadmap; the signing decision is made based on the full text of the relevant clauses.
• "Avoid asking vague questions: Concrete questions like "Which party has the unilateral termination right?" receive clearer answers than "Is there a problem with this contract?"
• "Summarising missing documents: The summary of a contract with attachments stored separately does not include the conditions within those attachments. Placing the attachments in the same folder and querying the folder closes this gap.
• "Summarise the previous version: every new state loaded during negotiation is re-read; ensure you view the summary of the current version when making a decision.

How are contract summaries used within the team?

Summaries are valuable more to the teams implementing the contract than to the legal or procurement teams drafting it. The warehouse manager wants to know about price increase clauses, accounting about payment terms, and sales about renewal dates. Having summaries visible in the file list allows each team to access the information they need without opening the document; if details are required, they can ask their own questions of the same document.

How to start using AI summaries in the organisation?

The easiest start is to choose the document type teams spend the most time on. In most companies, this is active supplier and customer contracts. When these contracts are gathered in one place, a summary of each appears in the file list and the question “which contract is ending when?” is answered within minutes.

The second step is deciding in which areas AI should be enabled. Granting AI permission only to a few relevant people in confidential areas such as personnel files or board documents, while opening it for wider use in other areas, is a balanced starting point.

The third step is monitoring usage. It shows where AI is truly adding value by indicating which teams have high monthly usage; settings are adjusted accordingly if needed.

How does SmartFiles solve this?

Every document uploaded to SmartFiles is automatically read; a four-section report titled Summary, Key Points, Structure, and Notable Details is generated, and the short summary appears in the file list. Fifteen formats including PDF, Word, Excel, and text files are supported; image files and scanned PDFs without a text layer (first ten pages) are evaluated via image analysis; even scanned contracts are summarised.

A user with AI permission asks questions about a document or the documents in its folder via the AI tab. The organisation administrator can disable AI completely via settings, monitor monthly usage, and grant AI permission at the area level only to relevant individuals.

The same question box also appears next to the preview window; you don't need to close the window to ask a question while viewing the full text of the document. When a new version of the document is uploaded, it is re-read, and can also be processed using Re-analyse in the AI tab. Answers are added to the chat history and remain in place when returning to the same document.

Document analysis with AIRead and analyse the AI summaryChatting with a document or folder

Frequently asked questions

Does an AI contract summary replace legal review?

No. The summary is a quick first read. For decisions such as signatures, termination, or disputes, relevant clauses must be read from the full text and legal advice sought if necessary.

Which file formats can be summarised?

SmartFiles reads fifteen formats including PDF, Word, Excel, and text files. Image files and the first ten pages of scanned PDFs are evaluated using image analysis. Password-protected files are not analysed.

Can questions be asked about all contracts in a folder at once?

Yes. The question box in the AI tab in SmartFiles allows asking questions about the selected document or documents in the current folder.

Can AI be disabled for specific documents?

In SmartFiles, the organisation administrator can completely disable AI; even when enabled, AI permission is granted at the area level, so it can be kept disabled in areas containing confidential documents.

How long does it take to prepare the contract summary?

In SmartFiles, shortly after a document is uploaded, usually within a few seconds, the summary appears in the detail panel and on the file card. The time varies depending on the document’s length.