As artificial intelligence becomes more widely used in business, many business owners are turning to AI tools to generate contracts quickly and cheaply.
While the result may look professional, an AI-written contract can create significant legal and commercial risks. One of the biggest misconceptions is that a lawyer can simply perform a quick review and sign off on the document. Unfortunately, fixing an AI-generated contract is often more complex than most people expect.
AI tools generate documents based on patterns and information drawn from existing content. They do not understand the specific commercial arrangement between parties, nor do they provide legal advice tailored to an individuals’ circumstances or goals.
As a result, lawyers frequently identify issues such as:
Even where the contract appears comprehensive, subtle drafting errors can create uncertainty when disputes arise.
A legal review involves far more than proofreading.
Before advising on a contract, lawyers need to determine:
Is the contract enforceable? The wording may seem correct but fail to create legally enforceable obligations.
Does it reflect the deal? The contract must accurately capture what the parties have agreed.
Are key risks addressed? Important provisions relating to liability, termination, payment obligations, dispute resolution and jurisdiction often require significant revision in AI-generated documents.
Does it comply with Australian law? Many AI tools draw from international precedents and templates that may not be appropriate for Australian businesses.
Business owners often use AI-generated contracts to save time and money.
However, if lawyers need to rewrite substantial portions of the agreement, the perceived saving can quickly disappear.
More importantly, unresolved errors can expose businesses to:
A well-drafted agreement is not simply a document. It is a risk management tool designed to protect your business when things don’t go as planned.
If you’re using AI-generated contracts or considering using AI to prepare business agreements, obtaining legal advice early can help avoid costly mistakes.
Contact Argon Law to ensure your contracts are legally enforceable and tailored to your business objectives.
A: Usually not. Lawyers must assess enforceability, legal risk, and whether the document reflects the intended commercial arrangement.
A: Some may be valid, but many contain provisions that are incomplete, inappropriate, or based on overseas legal assumptions.
A: Common issues include missing clauses, conflicting provisions, uncertainty around obligations, and compliance concerns under Australian and/or Queensland law.
A: In many situations, yes. Fixing an AI-generated agreement can require substantial redrafting, reducing or eliminating any perceived cost savings.
Copyright © - 2026. Argon Law. All rights reserved.
Privacy Policy
