Contract Defined Terms Extraction Checklist

What this checklist is for

A defined term is a word that a contract gives a set meaning. Long contracts define dozens of capitalized terms, such as “Authorized Users,” “Confidential Information” or “License Term.” Some terms are in a definitions section. Other terms get their definition in passing, in the middle of a paragraph. A term can have two definitions, a circular definition (one that points back to itself) or no definition. Each of these problems makes it unclear what the parties agreed.

This checklist finds every defined term and records where and how the contract defines it. It also makes sure that each term is clear, used, and used in the same way everywhere. The result is an alphabetical glossary and a short list of problems. Use it for contract review, for due diligence and to build a glossary for a complex deal. The checklist is a reading aid, not legal advice. Before you rely on the meaning of a term, ask a lawyer.

Where defined terms hide

Look in four places:

• The definitions section, usually near the start: “‘Services’ means…”
• Inline definitions in parentheses or quotes where the term first appears, such as Acme Ltd. (the "Supplier") or (each, a "Party").
• Exhibits and schedules, which often define their own terms.
• Other documents, through wording such as “as defined in the Master Agreement.” Write these terms down. You cannot review them without that document.

Also note whether a definition says “means” or “includes.” “Means” usually gives the complete meaning. “Includes” usually starts an open list. If the difference is important to your deal, flag it for your lawyer.

The checklist

#	Test	What to look for	Common mistakes
1	Every defined term is on the list	Definitions section, inline parentheses, quoted capitalized words, exhibits	You miss inline definitions in long paragraphs
2	The glossary has the definition and its location	The exact text and the section number	You paraphrase the text and do not quote it
3	Defined once	The contract does not define the same term twice with different wording	A different definition in an exhibit or order form
4	Clear	You can apply the definition without guessing. It does not rely on undefined capitalized words	Vague words such as “reasonable” or “material” with no test
5	Not circular	The definition does not use the term itself, or a term that points back to it	“Services” means the services provided by Supplier
6	Complete	Lists are finished, and the schedules that the definition names exist	A definition that points to a missing exhibit
7	Used	The term appears in the contract after its definition	A term that the contract defines but never uses
8	Used consistently	The term is capitalized everywhere that the defined meaning applies	“confidential information” in lowercase in one clause
9	Capitalized but undefined	Capitalized words that look like defined terms but have no definition	Terms that come from another template
10	No surprise meanings	A term does not mean something far from its ordinary meaning	“Business Day” defined to include weekends

Rows 7 and 10 match two points in the U.S. federal plain language guidelines. First, writers sometimes define terms that they never use, and this confuses readers. Second, a writer must never define a word to mean something other than its commonly accepted meaning. That guidance is for government documents, but it is also a useful test for contracts.

Record the result

Build the glossary first:

Term	Definition (short)	Where defined	Times used	Issue
Affiliate		1.1
Confidential Information		1.4
Effective Date		Preamble

Then list the issues by type, with section numbers:

• Defined more than once:
• Circular or unclear:
• Defined but not used:
• Used in lowercase where the defined meaning seems intended:
• Capitalized but not defined:
• Defined in another document:

Count the uses with the search function of your editor (Ctrl+F or Cmd+F), not by eye. Also search for the lowercase form of each term.

Use this checklist with Claude or ChatGPT

An AI assistant does two tasks well: it lists defined terms, and it finds capitalized words that have no definition. Before you upload the contract, make sure that your confidentiality obligations let you share it with an AI service. Remove names and figures that the review does not need. Then read the data settings of your workspace to learn how the service stores and uses uploaded files.

Attach the contract with its exhibits and paste this prompt:

Extract every defined term from the attached contract and check it
with this checklist.

1. List every defined term in alphabetical order. Include terms in the
   definitions section, inline definitions in parentheses or quotes,
   and terms defined in exhibits.
2. For each term, quote the exact definition and give the section.
3. Flag terms defined more than once, circular definitions, unclear
   definitions, and definitions that rely on undefined capitalized words.
4. Count how often each term is used after its definition. Flag terms
   that are never used.
5. List capitalized words that look like defined terms but are not
   defined anywhere in the document.
6. Flag places where a defined term appears in lowercase but the
   defined meaning seems intended.

For each flag, explain your reasoning. Quote the text; do not paraphrase.
At the end, list what you could not determine, such as terms defined
in documents that are not attached. Do not give legal advice.

AI tools sometimes paraphrase a definition and call the result a quote. They can also miss inline definitions or count the uses incorrectly. Compare every quoted definition with the contract. For each term that you plan to rely on, count the uses again. To learn what a term means for your deal, ask a lawyer.

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