What is AI Development Agreement Drafting?
An AI (artificial intelligence) development agreement is a specialized legal contract between a client and a developer. The client hires the developer to build or deploy an AI solution for them.
To be valid and encourage a smooth working relationship between parties, an AI development agreement must clarify various aspects of how they will work, such as who owns the data, what outcomes they want to achieve, and more.
Read the rest of this article to explore AI development agreements in greater detail, such as how to draft them accurately and how you can benefit from hiring a qualified lawyer to draft it for you.
What are Key Terms to Include in an AI Development Agreement?
An AI development agreement should include core essentials, such as the following:
- Ownership. Establish that the client owns the input data and how ownership is handled after contract termination.
- Training data limitations. Since confidential information is shared between parties, the developer must avoid using the client’s confidential data, such as to train third parties.
- Work scope. Outline exactly what the developer will build.
- Acceptance. This section should specify how to determine that the AI system is complete and has been accepted.
- Payments. Tie project milestones to payments, including payment triggers and how late payments are handled.
- Intellectual property (IP). Be clear about the ownership and licensing of IP, such as regarding pre-existing content and newly developed models or code.
- Indemnification. The agreement must include information about how responsibility for claims will be allocated, such as for IP infringement.
- Termination. There must be clarity about what will happen to IP and customer data when the agreement ends.
- Governing law and dispute resolution. Mention the applicable law and jurisdiction, as well as how disputes can be resolved. Dispute-resolution methods such as arbitration or mediation should be specified.
What are Tips for Drafting an AI Development Agreement?
When writing the terms in an AI development agreement, it’s important to add details so that parties understand what’s required. Here are some to include in the contract.
Consider Changes
There could be changes required during the project, so your agreement should include information about how they can be made and approved. This can include making changes to requirements, work scope, prices, and AI models.
Be Clear About Training Data
How data can be used for training should be specified so that you prevent disputes between parties. In this section, it’s important to explain who will supply the data and who owns it.
Include Human Oversight
You should specify in what conditions humans must review AI-generated outputs or decisions. This will help with providing accuracy and ensuring that AI tools meet specific standards.
Protect Data
An important part of using data is protecting it. Specify in the agreement what requirements must be met to keep data confidential. Include security controls and breach notifications. You must also align the clause with all applicable privacy laws.
Provide Maintenance and Support
Your agreement must provide clarity on various processes involved, such as hosting, model updates, and bug fixes. Support response times must be included, as well as what costs will apply to these tasks.
Describe Project Milestones
Outline all the project phases for clarity. This should include when payment will be triggered and additional fees that apply, such as delivery expenses.
Consider Third-Party Services
Your agreement must specify if the developer is allowed to use third-party AI models and who will take responsibility for the additional costs and risks involved.
How Does a Lawyer Help with AI Development Agreement Drafting?
Drafting an AI development agreement can be challenging, especially if it’s complex. Hiring a lawyer can help you because an experienced lawyer will:
- Provide a development scope. A lawyer will establish all specs, deliverables, and milestones for smoother procedures.
- Define key AI terms. A lawyer will ensure that parties understand all AI terms and processes, such as training data provisions.
- Establish ownership. A lawyer will make sure that the agreement states which party owns the IP, whether it’s pre-existing or developed during the agreement term.
- Secure confidentiality. By establishing requirements for protecting information and data, a lawyer will minimize your risk of disputes.
- Enable testing and acceptance. A lawyer will set criteria for testing and accepting deliverables, as well as provide information for how any issues can be resolved.
- Align the agreement with all laws. They will check that the agreement terms are aligned with privacy and consumer protection laws, as well as industry-specific regulations.
- Establish liability caps. They’ll provide a clear and valid limitation of liability clause to protect your interests.
Where to Find a Lawyer for AI Development Agreement Drafting
If you want a lawyer to draft your AI development agreement for you, you don’t have to pick up the phone and call traditional law firms in your location. Instead, use an online legal platform that makes it easy to connect with a lawyer who’s reputable and experienced in drafting legal contracts.
ContractsCounsel is one of the largest online legal marketplaces where clients gain access to a curated network of vetted lawyers.
To request that a lawyer drafts your AI development agreement, here are the steps to follow online:
- Go to the ContractsCounsel marketplace.
- Post your project, which is free to do. Try to include a few details to match with the right lawyer.
- Receive multiple bids from qualified lawyers on the platform.
- Review the lawyers’ profiles. ContractsCounsel provides lawyer data, such as their client ratings for previous projects, expertise, and credentials. This will help you to choose a lawyer who matches your requirements.
- Connect with a lawyer and hire them to draft your AI development agreement for a flat fee.
