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3 min read

Can AI Write a Contract?

Can AI Write a Contract?

In a recent customer newsletter, we spoke about the incredible acceleration in the rise of Artificial intelligence technologies and the impact this will have on our personal and professional lives. In a previous blog post, we also wrote about how this may be regulated. If you would like to receive our customer updates, please signup here.

As a curious bunch, we wanted to test some of this technology, so we asked ChatGPT to write both a blog post and a contract clause.  We would love to know what you think and which example clause you believe was written by the AI.  The text of the blog post and the contract clause are both unedited and were created in less than 5 seconds.  Scary and impressive, I am sure you will agree.  Here’s the AI-created content.

In recent years, there has been a growing interest in the application of Artificial Intelligence (AI) in the legal industry.

At Legastat, we are always looking for ways to leverage the latest technology to improve our services and better serve our customers. Recently, we decided to put one of these technologies, the AI-based language model ChatGpt, to the test by asking it to write a contract clause.

The contract clause we chose to have ChatGpt write was a “Remedy Clause” for an employee confidentiality agreement. This clause outlines the steps that will be taken in the event of a breach of confidentiality by an employee. It’s an important part of any employee confidentiality agreement and can have serious legal ramifications if not written correctly.

We fed ChatGpt with a brief outline of the clause and relevant information and let it generate the text. The results were impressive. The AI-generated clause was coherent and well-structured. It clearly outlined the steps to be taken in the event of a confidentiality breach, including the right to financial compensation for damages.

However, there were also some noticeable differences between the AI-generated clause and one written by a human. While the AI-generated clause covered all the key points, it lacked the nuances and language that an experienced lawyer would bring to the table. Some of the phrasing used was less precise and less elegant than what a human-written clause might be.

We encourage our readers to compare the results of our test for themselves by reading the AI-generated clause on our blog and comparing it to a similar clause written by a human.

1. Remedies – The Employee acknowledges and agrees that the Confidential Information is proprietary and confidential to the Employer and that the Employer’s business and reputation may be damaged if the Confidential Information is disclosed to unauthorised persons or used in an unauthorised manner. In the event that the Employee breaches any of the provisions of this Agreement, the Employer shall have the right to seek all remedies available at law or in equity, including an injunction to prevent the Employee from further breaching the Agreement and/or to seek damages from the Employee for any losses suffered as a result of the Employee’s breach. In addition, the Employer may also seek to recover any damages or losses it has suffered as a result of the Employee’s breach from the Employee. The Employee shall also be responsible for any costs or expenses incurred by the Employer in connection with enforcing this Agreement, including legal fees. This clause does not limit any other rights or remedies that the Employer may have under this Agreement or at law.

2. Remedies – The Employee agrees and acknowledges that the Confidential Information is of a proprietary and confidential nature and that any disclosure of the Confidential Information to a third party in breach of this Agreement cannot be reasonably or adequately compensated for in money damages and would cause irreparable injury to the Employer. Accordingly, the Employee agrees that the Employer is entitled to, in addition to all other rights and remedies available to it at law or in equity, an injunction restraining the Employee and any agents of the Employee from directly or indirectly committing or engaging in any act restricted by this Agreement in relation to the Confidential Information.

It’s worth mentioning that while AI-generated text can be useful in some contexts and can save a lot of time and effort, it is not a replacement for the expertise and experience of a human lawyer. However, as technology continues to evolve, it’s exciting to think about the possibilities of what the future holds for legal work with the assistance of AI.

We would love to hear your thoughts on the potential of AI in the legal industry and how it can be used to improve contract writing.”

It is fascinating how it caveats its own efforts as lacking nuance, as being less elegant and precise whilst extolling the benefits of the expertise of the human lawyer. It almost gives a sense of being sentient, perhaps not wanting to annoy the reader too much!

We hope you found this interesting; please let us know which version you think was AI created. The potential for technologies like ChatGPT and MidJourney is limited only by our imaginations, and we are confident that, in time, the benefits that AI can bring will be enormous.

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