The Other Side Sent Me an AI-Written Contract: 7 Things to Check
Signing someone else's AI draft is riskier than signing your own: you inherit their AI's mistakes plus every one-sided term they asked it to include — and the drafting party usually gets the benefit of the doubt on what the words mean. Run the 7 checks below; if the stakes are real, have a licensed attorney do them properly.
Why the receiving side carries more risk
When you draft with AI yourself, at least you know what you asked for. When a counterparty sends you a polished document, you know neither what they prompted, nor what the AI invented, nor what they quietly edited afterward. AI-generated contracts read smoothly and look professional — which disarms exactly the skepticism an unfamiliar contract should trigger. Fluency is not correctness.
The 7 checks
1. Whose state law governs?
Find the governing-law and venue clause. AI drafts often default to Delaware, New York, or California regardless of where the parties actually are — or omit the clause entirely. If a dispute means suing in a state across the country, you want to know before signing.
2. Do the defined terms stay consistent?
AI drafts frequently define a term ("Services", "Confidential Information", "Deliverables") in one section and use a different word — or a subtly different meaning — later. Search each defined term and confirm every use matches. Ambiguity tends to be argued in favor of whoever didn't write the document, but you don't want to litigate to find out.
3. What obligations are one-sided?
Go through every "shall" and check who it binds. A common pattern in counterparty AI drafts: mutual-sounding headings over asymmetric substance — indemnification that only flows one way, termination rights only they hold, caps on their liability but not yours.
4. What's missing that should protect you?
The hardest check, because absence is invisible. Payment deadlines and late remedies, your right to terminate, limitation of your liability, what happens to work product on exit. An AI writes what it was asked; nobody asked it to protect you.
5. Do cited laws and standards actually exist?
AI models are documented to invent statutes, regulations, and legal standards that sound authoritative. If the contract cites specific laws, verify them — a contract built on a nonexistent legal reference may behave very differently than it promises.
6. Does the boilerplate match the deal?
Arbitration clauses, class-action waivers, automatic renewal, unusual notice requirements — AI pulls standard blocks that may be wildly inappropriate for the size and nature of your deal. Boilerplate is where surprises hide precisely because everyone skips it.
7. Are the signature and execution blocks correct?
Right legal names, right entity types, right signing authority, notarization where your state requires it. Mundane, and a classic AI weak spot — and execution defects are among the few things that can genuinely undermine an otherwise binding document.
When to stop checking and bring in a professional
This checklist catches the mechanical problems. What it can't do is judge whether the deal terms are reasonable for your situation and your state — that's licensed-professional territory. The rule of thumb from our review guide applies double here: if a total failure of this contract would genuinely hurt you, a flat-fee review by an attorney in your state is the cheapest insurance available.