Should a Lawyer Review an AI Generated Contract?
An AI generated contract is a legal document that’s created with the assistance of artificial intelligence. Since automation is quick and efficient, AI contract drafting is becoming more popular. That said, human oversight of these legal documents is essential to prevent errors and potential legal loopholes.
Hiring a lawyer to review an AI generated contract is a smart move to protect your interests and minimize your risks. Read the rest of this article to explore how a legal review of AI generated contracts work.
Why Do AI Generated Contracts Need a Lawyer to Review Them?
Having a lawyer review your AI generated contracts can highlight various risks and prevent them from affecting you. Here is what a lawyer will look for:
- Mistakes. AI tools can make errors in the information they provide. There’s also the risk of hallucinations, which is when the AI tool creates fabrications.
- Lack of context. AI uses generalized data that isn’t customized to specific situations affecting the people signing the contract. It doesn’t take unique company goals or service scopes into account.
- Lack of professionalism. If the AI contract doesn’t contain updated and valid information, this can make your business contract come across as unprofessional to people you’re working with.
- Legal loopholes. This can include a lack of legal descriptions for terms in the contract, which can result in arguments about what was included and agreed to between parties.
- Misleading appearances. Although you might look at an AI generated contract and think that it’s professional and legally sound, it can be misleading, especially if you don’t have a legal background.
- Lack of balance and fairness. AI tools can’t evaluate if the terms in the contract are reasonable, fair, or consistent with applicable market standards.
- Missing jurisdiction information. The contract might not contain specific information about how its clauses are aligned with state laws, putting parties at legal risk.
What Should You Do Before Using AI to Generate Contracts?
Before you use an AI tool to create a contract for you, you can improve its performance and protect yourself by ensuring the following.
Give the AI Tool Enough Information
When prompting the AI tool to create a specific contract you require, you should give it context and explain your situation. Mention clauses that you want to include.
Do Your Own Research
You should take time to research the laws and regulations in your jurisdiction and industry so that you ensure compliance.
Keep a Track Record
Maintain an updated record of exactly what AI tool you use and a copy of all your prompts. This can help you if you end up in a dispute regarding the contract in future.
Consider its Benefits and Risks
Understand that using an AI generated contract does have its merits, but it also poses risks. Although you can use AI tools to help you craft documents, it’s wise to seek legal guidance to ensure that your contract is legal, clear, and balanced.
How Do Lawyers Review AI Generated Contracts?
When lawyers conduct a review of an AI generated contract, they know what to look for because of their expertise and experience. Here’s a rundown of what the legal review process typically includes.
- Considering the purpose of the contract. To give the contract context, a lawyer will ask the client questions about the type of agreement, its purpose, and the business relationship between parties.
- Checking the contract structure. A lawyer will ensure that the document isn’t missing any essential sections, such as definitions of key terms, payment and billing terms, dispute resolution methods, and more.
- Flagging AI language. The contract might have vague phrasing typical of AI, such as “as soon as practical” or “reasonable efforts” which are too general and can result in issues. A lawyer will rephrase these to be specific to the client’s situation and legally solid so they can’t trigger disputes.
- Considering all risks. A lawyer will ask important questions about future risks to protect both parties, such as what will happen if something goes wrong, if the warranties are realistic, and if liability caps are reasonable. It’s these details that result in protection provisions which could be lacking in AI contracts.
- Ensuring compliance. The contract has to be aligned with industry standards, data protection rules, local contract law, and more to ensure validity and enforceability.
- Making revisions. A lawyer takes the pressure off you to rework the AI generated contract because they will rewrite clauses and remove any inconsistencies.
How Much Does it Cost a Lawyer to Review AI Generated Contracts?
There are various pricing structures lawyers might use when reviewing AI generated contracts. Lawyers can charge an hourly rate, a flat fee, or a rate per page.
- Hourly rate. It's common for lawyers to bill an hourly rate because there could be uncertainty over how much work is involved. On ContractsCounsel, one of the largest online legal marketplaces, the average hourly rate is $250 to $350.
- Flat fee. This is a fixed amount the lawyer charges to review the contract. On ContractsCounsel, this can be an approximate amount of $600, but it varies depending on the type of contract and its complexity.
- Per-page rate. This provides a bit more flexibility than a flat rate in case there are additional tasks required during the review.
How to Request a Lawyer to Review AI Generated Contracts
To start the process of having your AI generated contract legally reviewed for accuracy and clarity, follow these simple steps:
1. Go to the ContractsCounsel marketplace and post your project. It’s free.
2. Wait to receive multiple bids from lawyers on the marketplace.
3. Once you receive the lawyer bids, you can review the lawyers' profiles. All lawyers are vetted on the platform. There’s lots of research provided by the platform to help you choose a lawyer, such as their location, client ratings, years of experience, and field of expertise.
4. Hire the lawyer who seems like a good match for your requirements.