AI in contracting is at a crossroads: innovation or ethics?

Emerging technologies promise to profoundly reshape our world. At the helm of this technological revolution is artificial intelligence (AI), whose remarkable capabilities have already disrupted a host of industries. Medicine, finance, and manufacturing – AI’s influence permeates far and wide. Now, contracting finds itself on the precipice of an AI-driven transformation. As this technology progressively reshapes contracting landscapes, a pivotal question arises: How can we integrate AI in a way that aligns with ethical values?

AI’s transformative potential in contracting

To grasp AI’s potentially transformative role in contracting, we must first demystify what AI entails. At its core, AI comprises technologies like:

  • Machine learning algorithms that analyze data to derive insights and patterns.
  • Natural language processing to enable comprehension of human language.
  • Robotic process automation is used to automate repetitive tasks.

Equipped with these capabilities, AI unlocks game-changing potential in the contracting space. It can:

  • Analyze troves of legal documents and contracts to extract key details with meticulous precision.
  • Seamlessly review complex agreements spanning hundreds of pages.
  • Bring tremendous efficiency gains by automating arduous manual reviews.
  • Boost accuracy by catching oversights even the most seasoned human could miss.
  • Democratize access to legal expertise for individuals and organizations once priced out.

Indeed, AI contracting tools have already begun realizing some of these benefits. Software can rapidly sift through contracts to identify risks, anomalous clauses, and compliance oversights. For major corporations that handle thousands of contracts, such automation provides invaluable time and cost savings. AI review can also help ensure adherence to regulations that have become highly complex.

Likewise, natural language processing empowers AI assistants to answer basic legal queries once reserved for attorneys. While not yet replacements for lawyers’ expertise, these tools provide some measure of legal democratization. Early examples indicate AI’s vast contracting potential.

Realizing the benefits while minimizing ethical risks

Yet AI integration comes with ethical pitfalls we must confront. One major concern revolves around ingrained biases. Because AI learns from historical training data, it risks perpetuating biases if left unchecked. In contracting, flawed algorithms could:

  1. Recommend one-sided terms that favor certain parties over others.
  2. Discriminate against individuals based on protected characteristics like race or gender.
  3. Shape contractual outcomes that exacerbate societal inequalities.

Transparency poses another challenge. As AI systems become more complex, retracing their decision-making grows increasingly opaque. This “black box” effect hampers accountability when disputes arise over AI-influenced contracting choices. It also breeds understandable wariness amongst parties asked to trust an inscrutable technology.

Additionally, workforce impacts must be addressed. If handled poorly, AI integration could displace contracting jobs and worsen economic inequality. And with AI handling sensitive contract data, robust security is imperative to avoid privacy breaches.

Overcoming challenges through responsible innovation

Surmountable as these risks may be, overcoming them requires forethought and care from stakeholders across sectors. On the technological front, innovations explicitly focused on ethical AI will prove instrumental. These include:

  1. Explainable AI systems whose decisions are interrogable and justified.
  2. AI oversight mechanisms to preserve meaningful human guidance.
  3. Monitoring and adjustment of data and models to curtail algorithmic biases.
  4. Retraining programs to smooth workforce transitions to new roles.
  5. Security measures like encryption and access controls for private data.

Fostering diversity and inclusion within AI development teams will further engender ethical perspectives.

The role of prudent regulation

Lawmakers have a vital part to play as well. Prudent regulations around AI transparency and accountability can provide necessary guardrails, laying the foundations for public trust. In 2021, the European Union’s AI Act put forth guidelines including:

  • Transparency obligations for high-risk AI systems.
  • Recording data to trace algorithmic decision processes.
  • Human oversight requirements.
  • Risk management frameworks tailored to different use cases.

Such regulations help actualize ethical AI while allowing room for ongoing innovation. However, a balanced approach is imperative. Overly blunt restrictions could inadvertently stifle progress, hurting the very individuals meant to be protected. Policymaking should therefore emphasize flexibility and collaboration with industry experts.

Organizational strategies for responsible AI adoption

At the organizational level, strategies promoting ethical AI integration will also be key. Technology companies must prioritize ethical design principles and assemble diverse development teams. Human resources divisions should prepare protocols assisting employees impacted by automation.

Within legal fields, bar associations and law firms will need to define best practices for AI utilization. Possible guidelines include:

  1. Requiring human lawyer review of all AI-drafted contracts before use.
  2. Limiting AI assistance to surface-level document reviews versus high-stakes disputes.
  3. Mandating software vendors to disclose details of their AI systems.
  4. Promoting AI literacy and training to support lawyer-AI collaboration.

Such standards can smooth AI adoption while preventing overreliance on still-fallible algorithms.

Amplifying Diverse Societal Voices

Crucially, the diverse voices of civil society must help guide discourse and decision-making. An equitable AI future cannot be dictated solely from the top down but should be shaped through broad public engagement. Contracting professionals, ethicists, technologists, policymakers, and community advocates each offer indispensable perspectives.

Inclusive public forums centered on AI in law could facilitate these exchanges. Structures promoting transparency, such as ethics boards and oversight committees, are also important. Giving everyday citizens a voice ensures AI systems reflect societal values.


AI contracting rightfully evokes both enthusiasm and caution. Handled irresponsibly, AI risks amplifying biases, opacity, job loss, and breached privacies. Yet properly nurtured, it could also herald enormous leaps in efficiency, accuracy and accessibility.

Realizing the benefits while minimizing the risks will demand nuanced solutions and collective responsibility. There are no perfect prescriptions. But just as stars guided mariners of earlier eras across unfamiliar waters, so too can humanistic values help steer our course.

With care, foresight and cross-sector cooperation, AI could transform contracting in ways that champion not just innovation, but ethics and humanity. The destination remains uncertain, but the first step is clear. We must begin the journey with wisdom, vigilance, and an unswerving commitment to the public good.

Join AI Contracting Week from Monday, 25 September to Thursday, 28 September 2023, where we will explore the transformative potential of Artificial Intelligence (AI) in shaping the contracting landscape.

About the author

Catherine King

Catherine is an accomplished marketing expert with over a decade of experience in successfully launching products and establishing partnerships across diverse industries, including research, skills, construction, agriculture, and FMCG. As the Product Marketing Manager at WorldCC, Catherine leads strategic plans for major product launches and has a keen interest in understanding stakeholder needs to create mutually beneficial solutions. With exceptional skills in contract negotiation, budget management, and relationship building, Catherine brings a unique and valuable perspective to effective Supplier Relationship Management.