Document crunch is an Artificial Intelligence platform dedicated to the Construction Industry. It alleges that their AI platform can immediately identify and explain critical and risky issues in your construction contract and other contract documents.
Although I am skeptical about their claims, I believe they deserve a fair review. I personally tried the demo version – so you don’t have to and here is my take on it.
Can document crunch really help you avoid disputes? Can it really help you understand and find out the critical issues in your agreement? Is Document Cruch legit? Document Crunch is found to be more suitable for small projects and non-lengthy contracts. Overall, the layout and interface are simple and does deliver, but the platform fails by overreaching the goals stated and lack of consideration to the uniqueness of each project.
Let’s find out more!
- What is the purpose of Document Crunch?
- Uploading a Sample Contract to try Document Crunch demo version
- Intial impressions on the Document Crunch
- More Results and review of Document Crunch trial
- Pros and Cons of Document Crunch
- The final verdict on Document Crunch
What is the purpose of Document Crunch?
According to Document Crunch, they have developed an AI platform that can help you identify risks in your contracts and can present to you these risky clauses simply without the contract jargon.
They target the following type of contracts:
- Commercial realsestate.
- General commercial documents.
- Corporate governance and compliance.
Going through the website and some other online reviews (Disclaimer: Do not know if these reviews are through some kind of affiliation or not – but it is assumed they are not), it is clear the Document Cruch is NOT the following:
- Legal advice.
- A replacement to contract managers.
- Targeted for everybody.
The main purpose of Document Crunch is to provide quick information for Contractors (mainly) who are on “the ground” and do not have the time or cost luxury to go through the contract clauses one by one prior to signing the contract.
This information will mainly consist of a direct explanation of contentious construction issues such as variation/change order clauses, the extension of time stipulations, and delay penalties or damages.
It is important to note that there is no human intervention or support in the process. As for pricing, 1 “Crunch” is a 300-page review or less is $300 noting that as the number of crunches increases the cost decreases,
Uploading a Sample Contract to try Document Crunch demo version
Well, I decided to give it a direct shot and uploaded a sample “Subcontract Agreement” for MEP works for a building project consisting of 5 levels with 2 basements and a roof. The main reason I chose this contract is that it fits the main targeted criteria.
Main Contractors will usually be enforcing their bespoke or modified on subcontractors and pressure them into signing. In addition, subcontractors will be under pressure for signature and usually have less negotiating power.
That being said, I was also personally engaged by the MEP contractor to review the Contract agreement for advice as they had doubts against the main contractor and fear that they will be heading to a dispute.
The Contract agreement uploaded consisted of:
- Only the Contract agreement clauses (no drawings or specs were included).
- Total number of pages: 56
- File size: Approx. 12.5Mb
The overall registration process was fairly simple. I provided my e-mail address and received access credentials directly in my inbox along with a self-explanatory video on document crunch.
Below is a screenshot of the document uploaded and the platform interface:
Intial impressions on the Document Crunch
Without further ado, below is a screenshot of the demo version trial. A pdf of the contract agreement is also attached with the main clauses such as contract amount and dispute stipulations highlighted in color.
You can go through each item (up to the limit of the demo version) and check the rationale and sample language.
So far, my impression is that it basically draws the main risky clauses in a contract that affects the cost or time and explains them in a simple manner, which is fine. Although this is important, my main concern is that contract clauses should be construed together in order to fully understand the risk and obligations of either party.
See below example for dispute resolution mechanism clause:
The Rationale/ Insights provided:
In this section, it attempts to explain the importance of contract time and the implications that might arise if the contractor failed to achieve this duration. Although what’s stated is basically true, it is a bit generic. The person authorized to sign the contract agreement is already in the business and even if not an expert, would be aware of such basic knowledge.
The following Sample Language “SL” is provided
The Good: The explanation for work continuance and payment is acceptable and direct to the point.
The Bad: Does not address the issues if a portion of completed work/ invoice is disputed, delay in payments, and the stage of claims – dispute.
To be fair, not all scenarios can be fully placed, but it’s worth checking.
More Results and review of Document Crunch trial
Going more on to details, I liked the layout presented. The below extract shows the original clause along with the Rationale and Sample language.
Let’s take the example of clause 26 (Disputes) – Part1:
The Rational States the following:
- This Crunch Field identifies the formal dispute resolution mechanism mandated by the agreement to be used, (e.g., litigation, arbitration, etc.) including any mandatory mediation provisions. This will not include typical in-project dispute resolution mechanisms such as an Initial Decision Maker, referee or other process for resolving claims at the project level.
- The parties will want to consider whether disputes should be subject to mediation as a condition precedent to formal proceedings.
- Similarly, the parties will have to weigh their personal preferences and considerations as to whether they prefer litigation or arbitration to be the formal dispute mechanism. There are pros and cons to both mechanisms.
The Sample Language States the following:
- WORK CONTINUANCE AND PAYMENT. Constructor shall continue the Work and maintain the Schedule of the Work during any dispute mitigation or resolution procedure. If Constructor continues to perform, Owner shall continue to make payments in accordance with this Agreement.
- DIRECT DISCUSSIONS. If the Parties cannot reach resolution on a matter relating to or arising out of this Agreement, the Parties shall endeavor to reach resolution through good faith direct discussions between the Parties’ representatives………….etc
Unfortunately, it turns out that the whole Rational part and Sample language are the same/ repeated for the sections. The software basically “gave its understanding” of the whole thing and is repeated next to each sub-clause.
I DO NOT LIKE THAT
Also, for a first-time user, it is not clear how this information can be leveraged. Some clauses might be imposed by the client on all contractors and subcontractors and are non-negotiable. A good example will be cooperation clauses, insurance clauses, and those related to health and safety.
In addition, the AI did not correctly interpret the full clause. In the contract agreement, going to court is only possible in one special condition with special prerequisites that is contingent on many other factors..
Pros and Cons of Document Crunch
The Pros of document crunch
The platform is user-friendly and attempts to cover the usual construction risks. The main advantages perceived of Document Crunch are:
- Easy and to understand.
- Acceptable upload and “crunch speed”.
- Attempts to make standard terms for the risky clauses.
- For a short contract, can give you a qucik feel or gauge on the risks associated.
The Cons and limitations of document crunch
The main disadvantages, keeping in mind that only a trial version was tested (could be better or worse), are:
- Limitations to to the different types of contract and how the clauses are actually interpretted. Example Design-build contract, EPC contracts, PPP contracts..etc each have the the clauses construed in a certain way with a legal reason behind it. Document Crunch cannot directly capture that risk.
- Makes use of standard terms that might not be applicable or the norm at your part of the world or legal jurisdiction.
- Output is repeated – So actual value gained is hard to measure.
- Actual time and effort will be still required to review the results, by some one with some contract knowledge, especially for big projects and lengthy contracts. Thus, overall cost for review will still be affected.
- It is obvious that American legislature and norms are followed. This might not be practical in other locations.
The final verdict on Document Crunch
Document crunch might be suitable for small value projects and non-lengthy contracts.
For more complex projects and contracts, I wouldn’t recommend Document Crunch, as human advice will offer better understanding and hence a greater return on investment in the long run.