Best Practice: Word Add-in Guide of Drafting Rules

Overview

Legal Playbooks are important; they allow teams to standardize processes, manage risk, and enable efficiency. Creating modern digitized playbook rules for your templates will empower your team to work smarter and more effectively in today’s dynamic work environments. 
Creating Drafting Rules is about translating your standard position or use case into a rule that the AI will understand and implement effectively. This guide will help create rules for your templates efficiently.

Purpose of Drafting Rules

Drafting rules are instructions designed to flag specific contract provisions or suggest edits to template text when using the Word Add-in. 
When implemented correctly, these rules help ensure templates align with company policies and legal standards.

Find more information about the Finalize Word add-in and AI features, including how to write and create drafting rules: HERE

Creating a Rule

Step 1: Organize Rules in the Rule Creation Spreadsheet

When drafting Rules, paste each Rule into your Rule Creation Spreadsheet.

• This serves as a central repository for all successful prompts and Preferred language, enabling quicker rule creation in the future.

Step 2: Define the Standard Position or Use Case
Establish your standard contractual position for the specific provision.

• Example: In an NDA, the post-termination confidentiality obligation should be indefinite to safeguard sensitive or proprietary information even after the agreement ends.

Step 3: Create and Test the Rule

Open the Rule creation interface and draft your Rule.

• Rule: Identify the post-termination confidentiality obligation in the NDA. If it does not specify an indefinite duration to protect sensitive or proprietary information post-termination, propose alternative language to ensure appropriate protection.
• Save the Rule and it will return to the interface where the Rule can be run.

Step 4: Run the Rule and Refine as Necessary

Execute the Rule to verify its effectiveness.

• If the Rule does not produce the expected results, click this icon. It is located at the top of the rule on the right-hand side. This will open the draft for further refinement.
• If you see repeated failures with a particular language, you can add the language as an extra example in the prompt to ensure it behaves as desired.
• Iterate on the Rule with this process until it yields the desired output.

Drafting Rule Components

When creating drafting rules, include these components (all are required unless noted as "optional"):

• Name (Rule name): The visible identifier of the rule.
• Description (Write a rule): The actual rule. The instructions for the AI on what to look for and how to make suggestions.
• AI language suggestions: Whether or not the AI should give a suggestion on how to update the text. If this is selected, the AI will generate "Suggested edits".
• Preferred Language (optional): Suggestion on what the language should be. This will always be the same for this rule (as opposed to the "AI language suggestions", which is an AI-generated suggestion).
• Notes (Internal notes) (optional): Additional information for the agreement author.

Why Prompts Matter

When writing drafting rules, clear prompts are required. Prompts are instructions or questions given to the AI, ranging from a sentence to a paragraph. The clearer the prompt, the better the response. A good prompt provides the necessary context, avoids ambiguity, and ensures the AI understands the request.

How to Build a Strong AI Prompt

1. Instruction: Specify the task or question in detail, avoiding vague or broad instructions.
2. Goal: Define the scope, objective, and desired output to ensure the AI delivers precise results.

Guidelines for Effective Drafting Rules

When writing the rule Description, keep these tips in mind:

1. Be Clear, Precise, and Action-Oriented:
   Effective rule descriptions specify the exact task and desired action to minimize ambiguity. Examples include:
   • “Flag the limitation of liability clause.”
   • “Ensure that the limitation of liability is always mutual.”
   • “If the governing law is not Massachusetts, change it to Massachusetts.”
2. Simplify Rule Design: Keep rules simple and avoid unnecessary complexity—break larger tasks into multiple smaller, focused rules for clarity and efficiency.
3. Focus on Contract Text:
   Drafting rules must pertain directly to provisions found within the template text.
4. Leverage Well-Known Legal Concepts:
   Use established legal terms such as:
   • “Assignment Clause”
   • “Governing Law”
   • “Limitation of Liability”

Using widely recognized legal concepts ensures clarity, consistency, and ease of implementation. 
However, if your interpretation or usage of a legal concept differs from its traditional understanding - such as having your Governing Law also consider language about the venue - specify these distinctions in the rule. 
Defining these nuances upfront will help the AI correctly interpret and apply the rule while aligning with your intended outcome.

Documenting Preferred Contract Language

It is recommended to document rules in a spreadsheet for review and organization. 
After finalizing your rule and determining the preferred contractual language, record it in the 'Preferred Language' section of the Rule in the spreadsheet. 
This ensures the language is associated with the specific Rule, making it easy to reference or copy and paste for future use. 

You can find an example spreadsheet here. It is a styled version of the CSV file provided by the Word add-in, with all needed columns. There is a separate sheet for each template, so all rules are in the same spreadsheet file, but each sheet only has rules for its own template

As your process evolves, consider adding the Preferred Language to your clause library. A clause library improves consistency, efficiency, and risk management by storing standardized, legally vetted language for contracts.

Tips for Utilizing LinkSquares’ Drafting Rules and AI-Language Suggestions Efficiently 

Spreadsheet

Before creating your rules, open the attached Rule Creation Spreadsheet in a tab on your window. Columns can be adjusted to align with the structure of your playbook, and additional columns may be added as needed. This approach helps rule structuring by providing clear prompts that can be tailored to achieve your desired outcomes. We recommend organizing rules into separate tabs based on the type of template; example tabs are included in the spreadsheet for reference. Please note that this spreadsheet is for organizational purposes only and cannot be used in the CSV Upload feature. 

Using the CSV Upload Feature 

The CSV upload feature simplifies bulk uploading rules and/or applying rules to multiple templates

• For rules applicable to multiple agreements, upload them to all relevant templates.
• For rules specific to a single template, such as post-termination terms in an NDA, manually apply the rule to that template only to avoid unnecessary clutter in unrelated templates.
• Use the spreadsheet provided in the app under the Rules section. Choose “Check your data formatting here”

Testing a Rule

Execute the Rule to verify its effectiveness.

• If the Rule does not produce the expected results, click the gear icon located at the bottom-right of the rule. 
• The rule editor will open for further refinement.
• Edit the rule and Save it (the editor will close automatically). 
• Wait a few seconds until the rule says NOT EVALUATED
• Then click the Run button to run the rules again.
• If there are repeat failures with a particular rule, add the preferred language to the rule description as an example to ensure the rule behaves as desired.
• Iterate on the Rule with this process until it yields the desired output.

Example Prompts (Rules)

Below are suggested examples of good drafting rules to help guide the writing of effective rules.

Effective Date Prompts 

Standard Position/Use Case: The effective date across all agreements is when the parties last signed the agreement.

• Rule:: Flag any language that refers to "effective date" language in the contract, if it does not explicitly state that the effective date is the last signed date of the parties, then suggest alternative phrasing that is legally robust and free of ambiguity.

Standard Position/Use Case: The effective date of the contract should not be subject to an Acceptance provision before taking effect.

• Rule:: Identify provisions where the effective date of the contract is contingent upon specific actions, approvals, or written acceptances by one or more parties; for example, language specifying a delay in the contract’s start date until such acceptance is formally provided. If language is found, suggest editing the language out of the document.

Governing Law Prompts 

Standard Position/Use Case: The company is incorporated in Massachusetts, and its contracts are therefore governed by Massachusetts law.

• Rule:: Ensure that the agreement specifies 'Commonwealth of Massachusetts' as the governing law. Flag any deviations and recommend changes to align with this requirement.

Standard Position/Use Case: Daisy, Inc. is incorporated in Delaware. If a Counterparty requests the governing law as RI, NH, or MA the language should be rejected for Delaware.

• Rule:: If Daisy, Inc. is one of the parties in this contract, and the governing law provision is Rhode Island, New Hampshire, or Massachusetts, suggest language that replaces the governing law language with Delaware.

Company Address Prompt 

Standard Position/Use Case: Ensure that the company's address is accurately completed and consistently applied throughout the contract where required.

• Rule:: Find and replace placeholders for Company, Inc.'s address, such as blank spaces like '______,' with '123 Main Street, Boston, MA 12345.

Date Prompt 

Standard Position/Use Case: Ensure that the date is accurately completed and consistently applied throughout the contract where required.

• Rule:: 
  • Identify and extract all dates mentioned in this contract, including but not limited to:
    1. Effective dates
    2. Execution dates
    3. Termination dates
    4. Renewal dates
    5. Deadlines for performance or notices
  • Any other specified dates related to obligations, milestones, or events.
  • Provide the dates in a clear, organized list, along with their corresponding context or reference within the document.

Auto-Renewal Prompts 

Standard Position/Use Case: Daisy, Inc.’s standard policy is that all templates automatically renew for a term equal to the Initial Term unless either party provides the other with written notice of non-renewal at least 60 days in advance.

• Rule: 
  • Analyze the provided contract text and locate any clauses related to automatic renewal. Specifically, identify instances where:
    1. The auto-renewal period differs from the Initial Term.
    2. Either party is not required to provide written notice of non-renewal at least 60 days in advance.
  • If these conditions are not met, suggest revising the contract to align with a standard position/use case that ensures:
    1. The auto-renewal term equals the Initial Term.
    2. A minimum of 60 days' prior written notice of non-renewal is required from either party.
  • Highlight the relevant language and suggest revisions where applicable.

Standard Position/Use Case: If there is automatic renewal in the document, then it should be removed.

• Rule: Review the provided contract text and identify any clauses related to automatic renewal. If automatic renewal is included, recommend removing the provision entirely to avoid unintended extensions of the agreement.

Payment Terms Prompts 

Standard Position/Use Case: Daisy, Inc.’s standard contractual position requires payment terms of Net 60 days.

• Rule: Extract the payment terms from the contract and identify if the specified payment period differs from Net 60 days. If the payment term is not Net 60 days, suggest modifying it to align with Daisy, Inc.’s standard contractual position of Net 60 days.

Standard Position/Use Case: Daisy, Inc.’s standard contractual position requires Net payment terms 60 days from the invoice date, prohibits calculating payment due dates on criteria other than the invoice date, and mandates invoice delivery exclusively by email.

• Rule: Identify if the payment terms in the contract include any of the following deviations from Daisy Inc.'s standard requirement of Net 60 Days:
  1. Payment terms exceeding Net 60 Days from the invoice date.
  2. Payment due dates are calculated based on criteria other than the invoice date (e.g., receipt of goods or services).
  3. Invoice delivery requirements other than by email.
  4. Flag such instances and recommend changes to align with Daisy, Inc.'s standard language, ensuring:
     • Payment is due Net 60 Days from the invoice date.
     • Invoice delivery is specified as email delivery only.
     • Due date calculation is explicitly tied to the invoice date.

Payment Terms Prompts 

Standard Position/Use Case: Daisy Inc.'s standard contractual position is to disclaim liability for all indirect damages and to limit direct damages to a maximum of 1 million dollars. The sole exceptions to these damage caps are for third-party intellectual property rights indemnity, gross negligence, willful misconduct, fraud, death, personal injury, damage to tangible personal property, and, where applicable, claims that cannot be limited under the governing law.

• Rule: Identify if the contract contains a Limitation of Liability clause that: 1. Disclaims liability for indirect, consequential, or punitive damages; 2. Caps direct damages at 1 million dollars; and 3. Excludes from such caps specific liabilities including third-party intellectual property indemnity (IPR), gross negligence, willful misconduct, fraud, death, personal injury, tangible personal property damage, or other claims uncappable under applicable governing law. If deviations are found, suggest changes to align with Daisy Inc.'s standard position and flag any additional risks introduced by broader or narrower exclusions or alternative damage caps.

Standard Position/Use Case: Daisy Inc.'s standard position is that the limitation of liability provisions must be mutual, ensuring equal protection for both parties involved.

• Rule: Please locate the limitation of liability provision in this contract and ensure that it is mutual, meaning it limits the liability of both parties equally. If the provision is not mutual, suggest revisions to make the liability caps and exclusions apply equally to both parties

Assignment Prompts 

Standard Position/Use Case: Any potential change of control event is considered confidential. As a result, Daisy, Inc. cannot legally comply with any requirement for prior notice or consent in such situations.

• Rule: Analyze the contract for any provisions requiring prior notice or consent in the event of a change of control. If such language is present, suggest edits to remove these requirements by stating: "Due to the confidential nature of change of control events, we recommend removing any prior notice or consent obligations and replacing them with a post-closing notification requirement, if necessary."

Standard Position/Use Case: Daisy Inc. must have no restrictions placed upon it to assign its agreements to affiliates.

• Rule: Daisy Inc. must have no restrictions placed upon it to assign agreements to affiliates. Find any language referring to express restrictions of assignment. Flag the language and suggest replacement language