The Compliance Challenge in Enterprise Operations§

Enterprise risk management requires continuous auditing of vendor contracts, SOC 2 reports, and privacy policies against strict regulatory frameworks (GDPR, HIPAA, ISO 27001). Historically, legal and compliance officers had to manually review 100+ page documents to identify missing data retention clauses or liability caps.

Using Structured Output LLMs paired with strict Zod / Pydantic JSON Schemas, compliance teams can automate document auditing with guaranteed structural adherence.

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Defining Compliance Schemas with Zod§

import { z } from "zod";

export const ContractAuditSchema = z.object({
  document_name: z.string(),
  overall_risk_score: z.enum(["LOW", "MEDIUM", "HIGH", "CRITICAL"]),
  violations_found: z.array(
    z.object({
      clause_title: z.string(),
      page_number: z.number(),
      severity: z.enum(["MINOR", "MAJOR", "CRITICAL"]),
      description: z.string(),
      recommended_remediation: z.string(),
    })
  ),
  data_retention_days: z.number().nullable(),
  unlimited_liability_clause: z.boolean(),
});

export type ContractAudit = z.infer<typeof ContractAuditSchema>;