Clause-by-Clause Negotiation Memo with Fallbacks
When the counterparty's draft lands and you need a negotiation plan, not just a list of problems, before your first markup or call.
A red-flag list tells you what is wrong with a counterparty draft. It does not tell your team what to ask for, what to settle for, or when to stop and call the client. That second step is where most negotiation time goes, and it is usually done in someone's head or scattered across margin comments. A clause-by-clause memo with tiered positions turns that thinking into a document the whole deal team can work from.
The prompt gives Claude the draft in tags first, then the deal context that changes every judgment: whose side you are on, deal value, business priorities and leverage. For each material clause it quotes the language, states the issue, and lays out an ideal position, an acceptable fallback, a walk-away point and drafted redline text, with a priority label. It finishes with missing provisions, cross-reference problems and a short strategy on what to lead with and what to trade.
The memo is only as good as the context you give it. Claude does not know your client's real risk tolerance, the relationship history, or what the other side conceded last time unless you say so. Fallbacks and walk-away points are proposals for the responsible attorney to adjust and confirm with the client. Read every quoted clause against the full draft, and verify any legal authority the memo references before relying on it.
The Prompt
<document> [PASTE THE COUNTERPARTY'S DRAFT, INCLUDING EXHIBITS AND SCHEDULES] </document> <deal_context> We represent: [CLIENT NAME AND ROLE, e.g., customer, vendor, licensee, buyer] Contract type: [e.g., master services agreement, supply agreement] Deal value and term: [APPROXIMATE VALUE AND LENGTH] Business priorities: [WHAT THE CLIENT CARES ABOUT MOST, e.g., uptime, IP ownership, price certainty] Leverage: [WHO NEEDS THE DEAL MORE, TIMING PRESSURE, ALTERNATIVES] Known non-negotiables: [ANY POSITIONS THE CLIENT HAS ALREADY TOLD US ARE FIXED] Governing law: [JURISDICTION] </deal_context> The document above is the other side's draft. Write a clause-by-clause negotiation memo for our team. For each material clause (skip boilerplate that is market and balanced, but list what you skipped at the end): 1. Clause: section number and a short verbatim quote of the operative language. 2. Issue: what the clause does to our client, in two sentences or fewer. 3. Ideal position: what we ask for first. 4. Acceptable fallback: the compromise we can live with, and what we might trade for it. 5. Walk-away point: the line below which we escalate to the client. 6. Proposed redline: replacement or inserted language, drafted to slot into the existing section. 7. Priority: Must-have, Important or Tradeable. Then add: - Missing provisions we should propose, with draft language. - Cross-reference problems (defined terms used inconsistently, sections that point to the wrong place). - A one-paragraph negotiation strategy: which asks to lead with and which to concede. Quote the draft for every point you make. If a position depends on facts I have not given you, or on [JURISDICTION] law you are not sure of, say so instead of assuming. This memo is a draft for attorney review; confirm any legal authority independently before relying on it.
Example Output
A memo that walks each material clause through quoted language, the issue, ideal ask, fallback, walk-away point, redline text and priority, followed by missing terms and a lead-with strategy.
Illustrative example — names, figures, and facts are fictional.
NEGOTIATION MEMO: Master Services Agreement (Counterparty Draft v1) Client: Larkspur Clinics (Customer) | Vendor: Northgate Data Services Deal: approx. $310,000/yr, 3-year term | Priorities: uptime, data ownership, exit rights 1. LIMITATION OF LIABILITY (Section 11.2) Priority: MUST-HAVE Quote: "Vendor's total liability shall not exceed the fees paid in the three (3) months preceding the claim." Issue: Cap is roughly $77,500 and one-directional. A data incident could exceed it many times over. Ideal: Mutual cap at 24 months of fees; uncapped for confidentiality and data-security breaches. Fallback: 12-month mutual cap plus a separate super-cap of 3x annual fees for data incidents. Trade: accept Vendor's narrower indemnity wording in 12.1. Walk-away: Any cap below 12 months of fees with no data carve-out. Escalate to client GC. Redline: "Each party's total liability under this Agreement shall not exceed the fees paid or payable in the twelve (12) months preceding the claim, except that this cap shall not apply to a party's breach of Section 8 (Confidentiality) or Section 9 (Data Security)." 2. TERMINATION FOR CONVENIENCE (Section 14.3) Priority: IMPORTANT Quote: "Vendor may terminate this Agreement for any reason on sixty (60) days' notice." Issue: Vendor can exit; Customer cannot. Sixty days is too short to migrate patient-scheduling data. Ideal: Mutual right on 180 days' notice, plus transition assistance. Fallback: Remove Vendor's right in year one; 120 days thereafter. Walk-away: No transition-assistance obligation at all. Redline: Insert new 14.6 (Transition Assistance) requiring up to 90 days of continued service at current rates. 3. FEE INCREASES (Section 5.4) Priority: TRADEABLE Quote: "Vendor may adjust fees annually upon notice." Ideal: Fixed fees for the initial term. Fallback: Increases capped at 3% per year. MISSING PROVISIONS - No service-level commitment or service credits. Proposed Schedule C attached in draft. - No data-return obligation on termination. CROSS-REFERENCE ISSUES - Section 11.2 refers to "Section 10 (Indemnity)"; indemnity is Section 12. STRATEGY Lead with liability and data return. Concede fee-increase language early in exchange for the transition-assistance clause. Fictional matter. Draft for attorney review; confirm the client's walk-away points before sending.
Tips
- •Fill in the leverage line honestly. A memo that assumes equal bargaining power produces walk-away points the client will never hold.
- •Run contract-red-flag-scanner first on a long draft, then paste only the flagged sections here if you need to keep the memo focused.
- •Ask Claude to put the Must-have items in a separate short list you can send the client for sign-off before the call.
- •Check every proposed redline against the defined terms in the full agreement. Redlines drafted in isolation often use a term the contract defines differently.
- •Treat the memo as a draft for attorney review, and verify any statute or case it mentions before it goes to the client.
Frequently Asked Questions
How is this different from a red-flag scan?
A red-flag scan identifies risky or missing terms and rates severity. This prompt assumes you already know there are problems and builds the negotiating plan: what to ask for first, the compromise you can accept, the line where you escalate, and the actual redline text. Many lawyers run the scan to triage a long draft, then run this memo on the clauses that matter.
Should Claude decide our walk-away points?
No. Claude can propose walk-away points based on the priorities and leverage you describe, but those are business decisions for the client, advised by the attorney. Use the proposals as a starting point for a short client conversation. Recording the client's confirmed positions back into the memo also makes it a useful reference for later turns of the draft.
Can I use this memo on the second or third turn of a draft?
Yes. Paste the latest counterparty draft and add a line listing the positions already agreed or conceded. Ask Claude to mark which clauses are new issues and which reopen points that were settled. For a turn-by-turn view of what changed, run document-comparison on the two versions first and include its output as context.
How do I keep the redline language consistent with the rest of the contract?
Paste the full agreement, including definitions and exhibits, rather than isolated clauses. Ask Claude to use only terms defined in the draft and to flag any place where its redline needs a new definition. Then read each proposed insertion in place. Redlines that look fine alone can conflict with notice, survival or order-of-precedence clauses elsewhere.
Related Prompts
Get New Prompts Like This Every Week
Join the free Claude for Lawyers newsletter — weekly prompts, tutorials, and practice-specific guides.