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Dangers of using ChatGPT in Contract Drafting

Reading time: 11 mins

This article discusses the risks of using artificial intelligence, like the Chat GPT model, for making legal contracts. Knowing its limits and the possible effects of using it is important.

In this article, we have a look at situations where AI programs such as ChatGPT may have missed issues, or drafted inaccurate contracts for particular scenarios. We look at the value of human knowledge and the need to balance technology and human input for optimal results.

What is ChatGPT?

ChatGPT is a language model developed by OpenAI. Using machine learning techniques, it generates human-like text based on the input it receives. The model has been trained on different internet text and is continuously evolving, however it lacks knowledge about the specific documents or sources it was trained from.

It helps with emails, coding, writing, answering questions, tutoring, translating, and creating characters for video games, among other things. ChatGPT can write well, but it doesn’t fully understand and may sometimes give wrong or confusing answers. The creators of language models such as ChatGPT are well aware of the limitations and provide users with disclaimers when they search for information.

Dangers of using ChatGPT in writing your contracts

In this digital age, artificial intelligence (AI) has become an integral part of many industries, including the legal sector. ChatGPT is praised by many for the human-like text creation, making them useful for many drafting or reviewing tasks. Although these tools offer advantages, individuals should also consider the risks and drawbacks they present.

Lack of Understanding

One of the limitations of ChatGPT, is its lack of genuine comprehension of the content it generates. ChatGPT can produce text that appears to be human-like. But it can’t understand the information it uses or the responses it creates.

ChatGPT and other AI language models are, at their core, statistical machines. They use patterns from lots of data to respond, but they don’t truly understand the subject in an in-depth way.

They don’t possess knowledge or understanding in the way humans do. They don’t have beliefs, desires, or experiences to draw upon. They analyze the given input and generate the most likely response based on the data they have been trained on.

As AI doesn’t truly understand the content, it can’t verify the accuracy of the information it’s providing. It can’t distinguish between reliable and not reliable sources, or between fact and fiction. This means it can sometimes produce responses that are misleading or outright false.

Furthermore, this lack of understanding can also lead to responses that are nonsensical or irrelevant. The AI can sometimes provide grammatically correct responses that do not make sense or answer the user’s question properly. This happens because it lacks the ability to understand context and provide appropriate answers in the same manner as humans do.

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Dependence on Input

The quality of ChatGPT’s output depends on the quality of the input it gets. This dependence on input quality is a critical aspect to consider when using ChatGPT.

If the input provided is ambiguous, incomplete, or flawed, the AI’s output will likely mirror these deficiencies. If the user’s prompt is unclear or poorly explained, ChatGPT might give an unclear or irrelevant answer. ChatGPT cannot understand incomplete or unclear information because it is an AI model and lacks human inference abilities, or the ability to find the inaccuracies and query the input for further information. It solely relies on the data it receives in the query and the patterns it learns from its training data.

Lack of Creativity

ChatGPT generates text based on patterns and structures it has learned from a vast dataset. It can mimic human writing to some extent, though it lacks the ability to think creatively or outside the box like a human.

Creativity is a complex process involving original thinking, making connections between ideas, and imagining new possibilities. The process is deeply rooted in our emotions, experiences, and subjective understanding of the world. This level of creativity is currently beyond the reach of artificial intelligence.

A lack of creativity can be a downside when using ChatGPT for drafting, as typically legal problems or drafting require some level of creativity when wording clauses to cover certain rights, obligations or responsibilities.

Ethical and Privacy Concerns

Ethical and privacy concerns surrounding the use of ChatGPT are varied and significant. People mainly worry about the possibility of misusing such technology, which can lead to various troublesome consequences.

One of the primary ethical concerns is the invasion of privacy. ChatGPT is capable of processing and generating information based on vast amounts of data. If not managed properly, these systems may unintentionally expose or use private information without permission.

Incorrect and fabricated information

ChatGPT can handle many topics, but sometimes it may give wrong or incomplete answers. Using complex words and discussing complicated topics can lead to these systems providing wrong or illogical information.

This is especially evident when dealing with specialized or technical fields that require expertise and a deep comprehension. Sometimes, ChatGPT may not fully understand complex topics, so its responses can be misleading or wrong.

Therefore, it is prudent for users to approach the information provided by ChatGPT with a critical eye. We recommend verifying information from reliable sources, especially when dealing with complex issues or when accuracy is paramount. Proper research is crucial for making informed decisions and avoiding the spread of false information. Users should base decisions on accurate information rather than blindly accepting AI-generated content.

ChatGPT can generate realistic yet completely fabricated content, which users may find concerning and should acknowledge. This can happen when the ChatGPT doesn’t know the right answer or doesn’t have enough data to give a correct or accurate response. ChatGPT can generate statements that appear real and logical, but they lack any foundation in reality.

A notable example of this issue is when ChatGPT references legal cases, such as decisions purportedly made by the Australian Courts. ChatGPT can sometimes generate case names, citations, and results that appear genuine. However, upon verification, it becomes evident that these cases are actually false. ChatGPT could use real cases but mix up the facts and laws, causing confusion and spreading false information regarding the outcome or precedent of such cases

Checking legal information from ChatGPT with reliable databases or consulting a qualified legal expert is important. Users should verify the validity and correctness of legal examples or information before using them professionally or in a legal setting. Users should exercise caution and skepticism when utilizing AI-generated legal materials. Although such content may appear persuasive, its legal information may lack credibility or enforceability.

contract drafting

Advantages of ChatGPT

Automation of Repetitive Tasks

ChatGPT excels at automating mundane and repetitive tasks, freeing up human workers for more complex and creative endeavors. This can significantly boost productivity in various industries, from manufacturing and logistics to customer service and data entry.

Improved Decision-Making

ChatGPT algorithms can analyze vast amounts of data to identify patterns and trends that humans might miss. This enables businesses to make data-driven decisions, optimize operations, and predict future outcomes with greater accuracy.

Reduced Human Error

ChatGPT and other AI models are less prone to errors caused by fatigue, distraction, or human bias. This can be crucial in fields like healthcare, where even minor mistakes can have serious consequences.

The Importance of Legal Expertise in Contract Writing

Contracts are the lifeblood of business and commerce. They form the foundation of agreements between parties, outlining rights, responsibilities, and expectations. A well-written contract can protect all parties involved, ensure a smooth and successful transaction and mitigate legal risk

However, drafting a legally sound contract is not as simple as putting pen to paper, or asking an AI model to draft you a contract. This is where the importance of human legal expertise in contract writing comes into play.

There are several reasons why legal expertise is crucial for writing effective contracts:

  • Contracts are governed by complex legal principles. A lawyer will have a deep understanding of these principles and how they apply to different types of agreements. This ensures that the contract is legally sound and enforceable.
  • A lawyer can anticipate potential risks and issues that may arise from the agreement. They can then draft the contract in a way that mitigates these risks and protects the interests of all parties.
  • Legal documents may contain legal jargon and can be difficult to understand. A lawyer can draft the contract in clear and concise language that is easy for all parties to understand. This reduces the risk of misunderstandings and disputes.
  •  Drafting a contract is often a collaborative process that involves negotiation. A lawyer can advocate for your interests and ensure that you get the best possible terms in the agreement.
  • Including a lawyer in contract writing ensures that your contracts are compliant with appropriate laws, and also helps to safeguard your interests, potentially preventing expensive errors.

How to balance technology and human expertise in contract writing

Balancing technology and human expertise in contract writing involves leveraging the strengths of both. ChatGPT make drafting faster, consistent, and error-free by automating repetitive tasks and using standard contract templates. However, human expertise is crucial for understanding the nuances of legal language, interpreting complex situations, and making strategic decisions. Lawyers assist with contracts by discussing terms, comprehending clauses, mitigating future risk, and ensuring the terms match the client’s objectives and risk tolerance.

ChatGPT is powerful, but it can’t replace human judgment and experience. An ideal balance would be to use technology for routine tasks. Additionally, relying on human expertise for the strategic and complex aspects of contract writing would be beneficial.

contract drafting

Key Takeaways

  • The use of ChatGPT in drafting contracts presents both opportunities and challenges. ChatGPT automates tasks, reduces errors, boosts productivity, and enhances decision-making. However, it’s important to acknowledge its limitations.
  • Users must exercise caution and verify AI-generated information against reliable sources, especially when dealing with complex legal matters.
  • Ethical and privacy concerns also warrant careful consideration to prevent misuse of the technology and protect sensitive information.
  •  Knowing the law is important for creating enforceable contracts, reducing risks, and accurately representing the parties’ intentions.
  • Combining technology with human legal expertise in contract writing enhances efficiency and ensures the legal integrity of contracts.

Frequently Asked Questions

Does use of ChatGPT expose the parties to breach of confidentiality?

ChatGPT can put sensitive information at risk of being exposed. It has experienced data breaches in the past, which exposed personal details of subscribers. This included names, email addresses, payment information, and the first message of conversations.

Artificial Intelligence also known as “AI” refers to the simulation of human intelligence processes by machines, especially computer systems. These processes involve acquiring information, using rules to make conclusions, and correcting oneself.

We can classify AI technologies into two main types:

  • Narrow AI does specific tasks like recognizing voices, making recommendations, or identifying images. They operate with a limited set of constraints and focus on a single narrow task.
  • General AI can do any intellectual task that humans can do. They can understand, learn, adapt, and implement knowledge in a broad range of tasks. However, this type of AI exists currently more in theory and research rather than in practical applications.
  • Copilot
  • Google Bard
  • Jasper AI

About the Author

Angelie Opalla
Angelie joined Prosper Law in 2022 as a Senior Paralegal, assisting with legal documents. Admitted to the Philippine Bar in 2023, her experience spans across firms in the Philippines and the US.

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