Limitations of AI in Contracts
Bhumesh Verma
International Corporate Lawyer | M&A | Foreign Investments | Contracts | Managing Partner @Corp Comm Legal | Adjunct Professor | Solution Provider
No discussion is complete these days without the topic of artificial intelligence sneaking in.
Artificial intelligence has considerable potential to streamline and enhance the customisation process of contract drafting, reviewing, and negotiation.
AI can efficiently analyse vast amounts of data to identify patterns, risks, and opportunities, making the process faster and more accurate.
However, there are several reasons why AI cannot entirely overrun the customisation process. Let us discuss few:
Complexities and Nuances. Contract drafting, reviewing, and negotiation often involve intricate legal, business, and contextual nuances that may be challenging for AI to fully comprehend and contextualize.
Human Judgement and Interpretation. While AI can make data-driven recommendations, the exercise of human judgement, intuition, and interpretation is often essential, especially in complex and unique situations that may not have clear precedents.
Regulatory and Ethical Considerations. Legal processes are subject to jurisdictional, regulatory frameworks and ethical considerations that require human overview and accountability, especially in sensitive areas such as data privacy, confidentiality, and compliance.
Relationship Building and Communication. The negotiation process particularly often involves relationship-building and effective communication, which are areas where human interaction and emotional intelligence play a crucial role.
Unforeseen Circumstances. In today's dynamic and evolving business environments, unforeseen circumstances and novel scenarios may arise that necessitate creative, context-specific solutions, potentially beyond the capabilities of AI.
In summary, while AI can significantly enhance and expedite the customisation process of contract drafting, reviewing, and negotiation, the involvement of human expertise, judgment, and contextual understanding remains essential to address the complexities and nuances inherent in legal processes.
Happy to hear your views.
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Attorney At Law, Real Estate Broker CA and HI at In-House Legal Counsel Business/Legal Consultant
1yInsightful and well done. AI needs the human mind/experience. Experience is invaluable.
I agree totally, I read a contract last week that had a 10 year non- compete clause, I asked the client why they had inserted such a long term and they said to me they had used AI to draft it. So here were a bunch of non-lawyers using AI to draft legal contracts.
HR Consultant/Private Legal Practitioner/Notary Public (Providing innovative HR solutions & Legal Services to your doorstep)
1yI appreciate this, it goes beyond AI more especially ethical and regulatory consideration. HR and legal practitioners will appreciate the distinction.
Long-time common sense, corporate lawyer advising companies and individual shareholders/ directors. Several years active involvement in the Post Office Scandal .
1yExcellent article as always. Another point , which I have noticed, AI doesn't have a sense of humour ! May not always be apparent in the case of various human lawyers ,either , but it certainly helps . Yair Lifshitz, any thoughts about all this ?
Corporate Director at SKJ Juris | Lawyer | Arbitrator | Mediator | Conciliator | Domestic | Cross Border | International | On-line | Offline | Fast Track | Institutional | Contractual | Commercial | Maritime
1yAgree. AI is as good as the human brain makes it. Without human brain, AI will produce half baked legal docs risking the interests of all concerned.