17th January 2023
Here is a thought:
imagine a ChatGPT browser extension that reads the Terms and Conditions agreement and flags anything that is non-standard
— Patrick Hsu (@pdhsu) January 16, 2023
Or, to perhaps put it another way: could Artificial Intelligence replicate, or even replace, the work of your normal contracts lawyer?
As someone who has spent over twenty years as a commercial lawyer (constitutional law is my interest, and contracts law my drudgery) I would say the answer is yes, and no, and but.
And as a coda, I will aver that those of us who write and comment on legal blogs may face a problem too.
Yes
The yes is a recognition that a certain amount of contracts law in practice is ploddery.
You have a standard form contract, and you read every clause, and you put all the clauses together.
Many standard clauses are what is called boilerplate – their effect, and often their very wording, are identical from one contract to another.
And even clauses which can vary from one standard from to another – payment arrangements, service levels, and key allocations of risk – do not vary very much.
In larger law firms, the task of reviewing, and even drafting, such contracts is given to junior lawyers, even trainees.
Many non-legally qualified contracts managers and procurement officers are better than many commercial lawyers in dealing with straightforward commercial contracts.
And so just as a text comparison program can identify differences between contracts better than almost any human, then a computer which has a bank of hundreds, if not thousands, of standard contracts would be able to identify standard and deviant clauses.
Such a computer may even be able to propose amendments to the deviant clauses so as to place the contract onto a more standard basis.
So, yes, some straightforward contracts reviews could be done by Artificial Intelligence.
No
Standard form contracts are subject to special legal rules in case law and statute, especially when they are for business-to-consumer transactions, and so a store of contracts would not enough: external legal expertise can be necessary.
And being able to advise a client on whether a standard form contract will be in their commercial interests or not is not something Artificial Intelligence is likely to be able to do soon.
That is because assessing commercial risk in a particular situation is not a form of abstract calculus, for it requires an understanding of industry, business, economic, social and human factors.
And, of course, not all commercial contracts are on standard forms.
Certain transactions require bespoke contracts, dealing with the allocations of risk of a range of things that could go wrong.
In IT and media contracts, for example, there often needs to be an understanding of technological risks so that the legal risk allocations match and mirror what problems can happen in practice.
A well-drafted and hard-negotiated bespoke commercial contract is as much a work of cooperation, conflict and collective endeavour as you will find anywhere else in human activity.
But
There is a problem.
The good lawyers who can advise on standard and bespoke contracts can do so because of their apprenticeship in dealing with straightforward clauses in everyday contracts.
You do not have child prodigies in practical law: a practice takes, well, a lot of practice.
One reason for this is that contracts are not linear documents but complex instruments: each clause can and should relate to other clauses.
And the only way to master complex instruments is to understand how the elements of that instruments all fit (or do not fit) together in given practical situations.
(I have said before that legal drafting is akin to coding in making sure lines all work together.)
This means that if Artificial Intelligence replicates and then replaces the work of junior contract lawyers it is difficult to see how senior contract lawyers will gain their necessary experience.
Coda
Perhaps a better route for Artificial Intelligence would be to replicate and then replace the work of legal bloggers and their commenters.
Perhaps the blogpost above was written by Artificial Intelligence, and perhaps also some of the comments below will be too.
If so, then Artificial Intelligence can merrily create blogposts and comments, rendering us all redundant.
Brace brace.
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