What is an AI Software Agreement Review?
An AI software agreement is a legal contract that’s signed between the software provider and a client who will use it. It’s similar to a Software as a Service (SaaS) agreement, as it needs to provide clarity on the working relationship between parties, such as by defining intellectual property (IP) ownership and data usage.
Reviewing this agreement is crucial to spot any red flags and protect your interests.
Read the rest of this article to learn more about what AI software agreements usually include and how to review them. We’ll also feature reasons why hiring a lawyer can help you through the process.
What’s Included in an AI Software Agreement?
An AI software agreement includes key terms, such as the following:
- Usage. The contract must specify what the usage scope is, such as what the software can and shouldn’t be used for.
- Data rights. Who owns the data? The contract must specify this so that there are no ownership issues that can cause disputes.
- Compliance. For peace of mind and to protect both parties’ interests, the AI software needs to be aligned with all data protection laws.
- Liability and risks. The agreement should include information about who is responsible if the software causes losses.
- Termination. Should either party want to terminate the agreement, the agreement needs to specify how this can be done.
- Confidentiality. It’s common for AI software agreements to include confidentiality clauses to protect client data so that it’s not shared with third parties or used without permission.
What are Tips for Reviewing an AI Software Agreement?
When reviewing your AI software agreement, you should look for some specific terms and clauses to ensure that it’s aligned with your interests and reduces your risks. Here’s what to look for in terms of scope, data rights, license rights, representations, termination, and performance standards.
Scope
You want the AI software agreement to clarify what the AI software does, how it can be used, and any limitations of which the client should be aware. Highlight vague descriptions that can be confusing or lead to high expectations.
Data Rights
The AI software agreement should clarify how customer data is used, stored, and accessed. Should the AI provider use customer data to improve their software performance, you want to check for details and processes so that nothing is left unclear.
License Rights
The client should receive the license rights they need to use the software in the intended way, but there should be clarity about what rights they have and don’t have to prevent future disputes.
Representations
Check for how the AI software will affect your company decisions and processes, such as in terms of its reliability. You want the agreement to define performance standards and processes for handling faults or downtime.
Termination
While you want to look for common termination specifications in the agreement, such as how much notice is required by either party prior to ending the contract, you also want to check what happens to the data after termination. For example, does it get returned or should it be deleted?
Similarly, it’s good to know how long you have to retrieve and use the data so that you don’t get put at a disadvantage after the agreement ends.
Performance Standards
Since AI software can make errors or fail, you want the agreement to set certain performance standards. Without these, you could end up in disputes with the other party, such as in terms of who is responsible for any drops in performance.
General Tips for Reviewing an AI Software Agreement
- Look out for vague or ambiguous wording. Any contract clause that contains vague or misleading terms, such as “may” or “generally”, should be flagged as it’s open to misinterpretation.
- Note one-sidedness. Check for any signs that the other party has more control and flexibility than you, as this could put you at a disadvantage.
- Flag missing details. Information that’s not included, such as in terms of ownership or data deletion processes, should be noted so you can ask the provider about it.
Do You Need a Lawyer to Review an AI Software Agreement?
You don’t always need to hire a lawyer to review an AI software agreement, such as if you’re providing or using a low-cost tool or you’re not dealing with sensitive data. However, it’s advisable to get a legal review if you’re unsure of anything in the contract or you’re dealing with sensitive data and high risks, whether financially or legally.
Here’s how a lawyer can help you with an AI software agreement:
- They’ll identify any hidden risks that you might miss, such as ambiguous data usage terms or liability red flags.
- They’ll explain any confusing wording, such as legal jargon, so you know all your rights and duties.
- They’ll scrutinize protections to guard your interests, and can make revisions to the agreement should this be required.
- They’ll check that the agreement is compliant with all laws and regulations.
- They’ll give you peace of mind that the agreement is clear, reasonable, and legal, so you don’t risk signing a contract that puts you at risk.
Where Can You Find a Lawyer for an AI Software Agreement Review?
If you’ve got a complex or otherwise confusing AI software agreement you’d like reviewed by a professional lawyer, you should hire a vetted lawyer from ContractsCounsel, one of the largest online legal marketplaces where clients can connect with experienced and reliable lawyers for contract review.
Here are the simple steps to follow if you want to hire a lawyer from the ContractsCounsel platform to review your AI software agreement.
1. Go to the ContractsCounsel marketplace, where you can post your project. It’s free!
2. Specify some details about what you require so lawyers know how to help you.
3. Wait for lawyer bids. You’ll receive multiple bids from lawyers on the platform who want to review your document.
4. Review the lawyers' profiles based on criteria such as their location, experience, credentials, and client ratings for previous projects completed on the platform.
5. Select the best lawyer for your purposes, and get peace of mind that your contract is professional, fair, and legal.
