AI Software Agreement: Key Terms, Review Tips, Legal Help

What is an AI Software Agreement?

An AI software agreement is a contract signed by an AI technology provider and client. It specifies how the AI tools can be used by the client and what services the provider offers.

You might need an AI software agreement if you’re involved in developing or using AI in any way that could result in issues such as ownership concerns or legal obligations. Examples include if you’re licensing AI software, training AI on data, or building AI for a client.

Since an AI software agreement can involve risks, such as privacy violations, it has to be clear and thorough.

Read the rest of this article to learn more about AI software agreements, how to review and negotiate them, and when to consult a lawyer for professional guidance.

How Do AI Software Agreements Vary from Traditional Software Agreements?

One of the biggest differences between AI software agreements and traditional software agreements is that AI systems provide variable outputs. They’re not always identical as compared to what you’ll use in traditional systems. Drafting an AI software agreement therefore requires adjustments in how liability and performance metrics are handled and defined.

Another important difference to know is that AI systems and rules constantly change and evolve. This means that there should be information for parties about how changes made to the software will be handled.

What are Common Mistakes Users Make with AI Software Agreements?

When drafting AI software agreements, users might make the following mistakes:

• Using standard terms. This prevents you from dealing with specific risks, roles, and liabilities related to the AI software being used.
• Lack of data usage provisions. The input data will be stored and used, which could violate privacy rules. Not being aware of this can lead to disputes or losses.
• Not defining ownership. If there’s no clarity about who owns the AI outputs, this can cause uncertainty and misaligned expectations between parties.

How Can You Review and Negotiate an AI Software Agreement?

Once your AI software agreement has been drafted, you’ll want to review it and possibly negotiate some of its terms before agreeing to it. Here are some tips on how to do this.

Note Ambiguous Phrasing

If there’s anything in the contract that isn’t clear and specific, you should flag it to discuss it with the other party. This will protect you against hidden risks.

Check Data Usage

You want to understand how the data is being used and stored, and if it’s allowed to be shared. If you don’t have clarity, you could be vulnerable to your sensitive information being exposed.

Know Who Owns Outputs

You can’t assume that you’ll own everything the AI software creates. If it’s not specified in the agreement, you should check if you can use the outputs for commercial purposes.

When reviewing the agreement, it helps to consider what you need the tools for so that the permitted usage is aligned with your requirements.

Ensure Performance Meets Your Expectations

You don’t want your use of the software to be interrupted, so check what the agreement says about uptime commitments from the AI provider. You should also get information about the support you can expect to receive.

Request Notifications for Changes

When discussing any concerns you have with the provider, you should request notification for changes they make to the software if it’s not included in the agreement. This will prevent delays or other issues when using the software.

Don’t Ignore Compliance

To protect yourself against legal issues in future, check what the agreement says about compliance, such as in terms of privacy laws. This should be reviewed with your roles and responsibilities in mind so that you don’t accidentally violate any rules.

Should You Hire a Lawyer for Help with an AI Software Agreement?

You don’t always have to work with a qualified lawyer for help with AI software agreements, but they can assist you in various ways, such as by reviewing the contract and negotiating its terms. Here are some details of how they will help you.

• They’ll look for hidden risks in the contract. This prevents too many risks from being your responsibility, such as if the AI makes errors.
• They’ll check how your data is used and stored.
• They’ll explain all intellectual property (IP) rights.
• They’ll confirm that all teams in the agreement are compliant with relevant laws and regulations.
• They’ll negotiate terms you wish to change, such as by pushing for higher caps to balance liability.
• They’ll get all agreed-on negotiations down in writing so that parties don’t dispute them later.

If you’d like a review of your AI software agreement, you can hire a lawyer from an online legal platform like ContractsCounsel, one of the largest online legal marketplaces where clients can hire qualified lawyers who have been vetted on the platform.

Here is how to request a review of your AI software agreement:

1. Go to the ContractsCounsel marketplace and post your project for free.

2. Receive multiple bids from lawyers directly on the platform who can assist you.

3. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise.

4. Hire a lawyer who is best suited to your requirements.

Why Should You Hire a Lawyer From ContractsCounsel?

ContractsCounsel offers a wide selection of vetted lawyers who can handle your legal tasks and provide support while offering cost-effective services. Some of the platform’s benefits include:

• Fixed-fee pricing. All costs are transparent and you can compare quotes to get the best deal.
• Quick and easy access to vetted professional lawyers. All lawyers on the platform have been screened.
• Stress-free searching. You can find a lawyer for your requirements from the comfort of your home.
• Data conveniently on the platform. Review the lawyers’ profiles before hiring one for your contract review or negotiation. The platform provides lots of data, such as regarding the lawyers’ expertise and experience.