9 January 2023

Artificial Intelligence or Real Stupidity: Using GPT-3 to Draft Contracts

Written by James Milliken

Artificial intelligence (“AI”) plays an ever-increasing role in our everyday lives. It is used in Face ID and other image recognition software, emails, social media, digital assistants, online banking and driving aids, to name just a few applications.

It can be used to simplify repetitive tasks, carry out automated processes, recognise patterns and generally leave us free to concentrate on other, more cerebral endeavours. However, we are beginning to see AI being put to work on more complex tasks, including assisting lawyers with drafting contracts. This has several important implications for lawyers and their clients and is an area that must be carefully monitored for developments as AI improves in the coming months and years.

Artificial Intelligence: Definition and Use Cases

The Oxford English Dictionary defines artificial intelligence as ‘the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making and translation between languages’. In its simplest form, artificial intelligence is a field which combines computer science and robust datasets to enable problem-solving by means of complex algorithms. AI can, broadly speaking, be divided into two main types:

  • Weak AI: AI trained and focused on performing specific tasks. Weak AI drives most of the AI that surrounds us today, from Apple’s Siri to Amazon’s Alexa, autonomous vehicles, targeted advertising, customer service chat-bots and automated stock trading programmes; and
  • Strong AI: a currently theoretical form of AI where a machine would have an intelligence equal to humans with a self-aware consciousness that has the ability to solve problems, learn, and plan for the future. No viable form of Strong AI has yet been developed, but we can see an example in HAL, the superhuman, rogue computer assistant in 2001: A Space Odyssey.

The number of actual and potential uses of AI in everyday life has resulted in many tech companies across a huge range of industries investing heavily in AI technology.

OpenAI and GPT-3

There has been a great deal of excitement in the AI world around a newly developed technology known as Generative Pre-trained Transformer 3 or, more snappily, GPT-3. Put simply, it is an AI that is better at creating content with a language structure – human or machine language – than anything that has come before it. Developed by OpenAI, a research business co-founded by Elon Musk, it has been described as the most important and useful advance in AI to date. In very simple terms, it generates text using algorithms that have been trained by being fed a colossal amount of information gathered from the internet – hundreds of billions of language fragments. This means that it can create anything that has a language structure; it can answer questions, write essays, summarize long texts, translate languages, take memos, and even create apps and computer code. Needless to say, this is revolutionary stuff. If it proves to be usable and useful in the long term, it could have huge implications for the way documents, software and apps are developed in the future.

What is AI Contract Assist?

The Seattle-based tech startup Lexion is the latest company to take advantage of this powerful tool. It has developed a Microsoft Word plugin, currently in the beta testing stage, which it says will allow users to ‘draft, redline and execute contracts faster with AI assist’. It includes functionality that assists lawyers by suggesting potential amendments, proposing language in relation to specific clauses and creating summaries. To give an example, a solicitor working through a markup of a contract may agree with their client that they wish to remove an uncapped indemnity. The solicitor could then ask AI Contract Assist to delete the existing language, suggest appropriate replacement phrasing and tweak the new clause so that a new capped indemnity is properly included in the contract. Lexion states that the aim of the tool is to ‘reduce the time that [solicitors] need to invest in the contract review process by providing them with suggestions that they can use as a starting point’.

Implications for the Future

The development of AI Contract Assist and similar tools, which are sure to follow, is, without a doubt, an exciting prospect in the contract law world. It has the potential to speed up review, optimise workflows, encourage consistency and may even reduce the professional fees that clients pay their solicitors. While the technology is impressive and can speed up a trained solicitor’s job, clients should be aware of certain pitfalls associated with its use:

  • Unlawful and Unenforceable Clauses: the AI software is as yet unable to make a value judgment as to whether a particular clause that a user asks it to draft is lawful or legally enforceable. The tool drafts a clause as requested but cannot provide any legal advice on the implications of that clause. For example, clients may inadvertently find themselves open to criminal or civil liability or to fines from regulators such as the Competition and Mergers Authority by including clauses that breach competition law.
  • Internal Consistency: AI Contract Assist can provide detailed drafting of bespoke clauses. However, it cannot advise on whether those clauses are consistent with existing drafting and concepts, and indeed whether they are appropriate in the context of the document as a whole.
  • Negotiation and Advice: this AI tool is just that, a tool for drafting contracts. It does not advise on the benefits or drawbacks of specific clauses and how they may affect a party’s negotiation position, nor can AI contract assist in explaining what a clause might mean for the client from an operational perspective. The software does not replace the detailed, bespoke advice that a trained solicitor can provide drawing on their wealth of industry experience.


AI has a role to play in our everyday lives in the home and at leisure; it is no surprise that this powerful technology is being harnessed to benefit us in our professional activities. AI Contract Assist and tools like it present exciting opportunities and challenges from a legal point of view. They will change how solicitors work, allowing more to be done and more clients to be helped. Less time will be spent on drafting, freeing solicitors up to assume a more valuable advisory role for their clients akin to the other trusted business advisers that any prudent business will rely on. However, clients should be cautious about trying to use this technology without the assistance of a trained solicitor. AI Contract Assist drafts what it is asked to draft; it cannot advise you on whether that drafting is appropriate in context. For now, at least, the support of a trained contract law expert is invaluable to clients who are developing and entering into contractual relationships.

If you would like any further information or advice, please contact James Milliken from the Commercial team.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.

About the author

James Milliken


James is a Solicitor in the Commercial team at Carson McDowell. James advises on a range of commercial matters including general commercial contracts, technology and innovation, intellectual property and data protection.

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