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Business owners and individuals may be tempted to choose to rely on AI rather than instruct a solicitor. And why wouldn’t they? The logic is easy to understand. AI can be free and can produce sophisticated responses in seconds, at any time of day without the need for onboarding. However, relying on AI without legal advice can create risks that are not always obvious until something goes wrong.
Mistakes are Costly
There’s no getting away from the point that mistakes cost money. While AI can draft a complete contract, this does not mean the contract is legally or commercially effective for the circumstances.
AI will usually prepare any type of contract with the “full” suite of clauses available to it. AI is not however typically able to fully reason, evaluate or amend the clauses in light of given circumstances. We are frequently being provided with documents which have clear AI markers. They are often well structured and can appear impressive on first reading. However, once the drafting is considered in the context of the wider transaction, issues usually emerge. A clause may be technically correct in isolation but fail to reflect the commercial agreement reached between the parties.
For example, on a share sale, the key transaction document is the sale and purchase agreement (referred to as the “SPA”). An SPA can be an extremely lengthy document with a minor drafting point turning the tide if a dispute should arise in the future. There are often deal-specific clauses which need to be drafted by your solicitor. Any deal-specific clauses are bespoke to the terms of the transaction and the SPA itself. It’s common for SPAs to include exclusions and limitations for different terms. For example, a limitation of liability clause which only applies to a certain indemnity. It’s the role of your solicitor to ensure the drafting reflects the intended position of the parties. This requires an understanding of how the SPA operates as a whole and how individual provisions interact with one another.
Governance
The question of how AI use should be regulated remains an evolving subject. While the European Union’s AI Act (Regulation (EU) 2024/1689) came into force in 2025, there is currently no equivalent standalone legislation in England and Wales.
Instead of a singular governing piece of legislation, England and Wales is opting for a regulatory framework with the monitoring of AI use to be left in the hands of regulators.
Experience
The experience of a solicitor should not be overlooked. Solicitors will take the time to get to know you and your business. Before drafting any type of contract from a sale and purchase agreement to a manufacturing agreement, a solicitor will consider the wider purpose of the agreement in hand including any effects on existing agreements and the future plans for the business.
AI can draft a contract in seconds. Ensuring that contract reflects the commercial deal, protects your interests and achieves the intended outcome remains the role of an experienced solicitor.