Before you sign a large commercial contract, translate each clause into what the company must do, what it will pay over the full term, how much it costs to leave, and who owns the relationship after signature. Paste the draft agreement or counsel's summary, the business case, current and forecast volumes, the operating plan, and your approval policy into one request. Instruct Pingpong to list every commitment the company takes on, price the contract over its realistic life, and flag terms that conflict with the plan. Review your written answers in a second round. Counsel owns the legal review. Pingpong tests business readiness and the commitments that hide in the operating details.
This page is for chief executives, finance and operations leaders, and directors approving a vendor, customer, services, or real estate agreement large enough to matter. Executive starting points live under Pingpong for executives.
Turn clauses into commitments
For each clause below, write who on your side performs it, how it is measured, and what it costs if you miss.
- Minimums and volumes: what you pay for whether you use it or not.
- Price escalators: the price in the final year, and in any renewal.
- Renewal: whether it renews automatically, and the notice date to stop it.
- Termination: the cost to leave early, and what happens to your data.
- Service levels: what the credits are worth compared with the business harm of an outage.
- Liability: the cap compared with the worst realistic incident.
- Your obligations: anything your team must deliver for the other side to perform.
Price the whole term
Add every year at the escalated price, plus minimums you may not use, plus the exit cost. Use that total to decide who approves the contract, since a first-year fee can fall under a threshold the full term exceeds.
A worked example
This example is illustrative and does not describe a customer. A 300-person consumer subscription company is about to sign a three-year contract with a customer support outsourcing firm. The first-year fee is $2.4 million, which falls under the chief executive's approval limit. Board approval is required for commitments over $5 million.
The chief operating officer pastes counsel's summary of the draft, ticket volumes for the past year, the product roadmap, the support plan, and the approval policy.
A useful pass finds that a 7% annual escalator brings the three-year total to about $7.7 million, above the board threshold. The contract bills a minimum of 40,000 tickets a month. Current volume is 32,000, and the roadmap aims to cut tickets by 20% through self-service, so the company would pay for about 14,000 unused tickets a month by year two. The contract renews automatically for three more years unless notice arrives 180 days before the end. Leaving early costs half of the remaining fees. The firm's agents will handle customer payment details, but liability is capped at three months of fees, a gap counsel should address. Service credits top out at 5% of the monthly fee. One clause requires the company to update training materials within five days of any product change, and no one on the support or product teams owns that work.
The chief executive takes the contract to the board at its full value. Counsel negotiates a minimum of 25,000 tickets that steps down as self-service ships, an escalator capped at 3%, a renewal that requires both sides to agree, and an early exit fee that falls each year. Counsel also seeks a higher liability cap for incidents involving payment data. The vice president of support owns the relationship, including the training obligation, and reports volumes against the minimum each quarter.
If the agreement shapes your strategy, with exclusivity or roadmap commitments on both sides, see test what you give and get before you partner.
A request you can copy
Below are counsel's summary of a draft commercial contract, our business case, current and forecast volumes, our operating plan, and our approval policy. List every commitment the company takes on and who would perform it. Calculate the total cost over the full term, including escalators, minimums, and exit cost. Flag terms that conflict with our plan, renewal dates we could miss, and gaps between liability caps and realistic risk. Mark legal questions for counsel. Stop there so we can answer in writing, then review our answers.
How Pingpong runs the review
The web review app sends your request through several models in order. Each later model receives the original request and every earlier answer, with instructions to assess the work so far. For the steps inside the app, see running your first review.
What a model can't review
A model sees only what you paste. It does not know the other side's track record, what was said in negotiation, or how a court would read a clause. Counsel owns legal advice, and you and the board own the decision.
When the contract goes to the board, see war-game a decision before the board meeting. More guides live under work decisions before you commit.