Generative AI in Contract Terms and Conditions

Time 2 Minute Read
August 31, 2023
Legal Update

“The development of full artificial intelligence could spell the end of the human race.”
‒Prof. Stephen Hawking

While it is obviously premature to determine whether Professor Hawking’s prognostication will be proven correct, we should not kill off basic elements of contract law along the way. As providers of information technology products and services grapple with how best to incorporate generative AI into their respective products and service offerings, many are realizing that their current terms and conditions do not specifically address generative AI and the risks that are inherent to the technology (or, at least, not currently known). In an effort to allocate liability for the use of (or benefits provided by) generative AI, providers are often ignoring basic tenets of contract law and attempting to unilaterally amend existing agreements with their customers or otherwise strong-arm their way into a more provider-friendly construct.

Depending on the scope of the products and services offered by the provider, adopting such an amendment or agreeing to a provider-friendly approach may significantly increase the customer’s exposure to infringement, employment, and privacy-related liabilities, as well as a number of other risks relating specifically to the use of artificial intelligence.

If you have received a communication from any of your providers attempting to amend or otherwise alter the terms of your existing agreement, consider whether you would accept the proffered terms in more typical contexts. We would be happy to assist in reviewing these proposed contract amendments, and have already helped several clients do so. 

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