For those unfamiliar with Chat GPT, it’s essentially an artificial intelligence (AI) chatbot that was created by a company called Open AI. It has received much attention as of late for its keen ability to generate all types of content and documents, from content for social media to memos to email content. You just ask the chatbot a question or enter in some search terms, and you have the content you’re looking for in seconds. But while Chat GPT may be useful in drafting some types of documents, you should not use it for anything legal in nature
Technically, Chat GPT Can Create Legal Documents
You can technically use Chat GPT to create a legal document. For example, we asked it to “draft an indemnity agreement for my company” and it created an official six paragraph document. The first few paragraphs are below:
[Your Company Name] Indemnity Agreement
This Indemnity Agreement (the “Agreement”) is entered into as of [Date], by and between [Your Company Name], a [Your Company’s Legal Structure] (the “Company”), and [Indemnifying Party’s Name], having its principal place of business at [Indemnifying Party’s Address] (the “Indemnifying Party”).
- Indemnification Obligations
The Indemnifying Party agrees to indemnify, defend, and hold harmless the Company, its directors, officers, employees, agents, and affiliates (collectively referred to as the “Indemnified Parties”) from and against any and all claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) Any breach of this Agreement by the Indemnifying Party; (b) Any negligent or wrongful act or omission of the Indemnifying Party or its agents, representatives, or employees; (c) Any violation of applicable laws, regulations, or industry standards by the Indemnifying Party; and (d) Any third-party claims or actions resulting from the Indemnifying Party’s products, services, or actions.
Granted, you may have to tweak some of the content and fill in a few blanks, but the above is the beginning of a valid indemnity contract. But there are a few concerns.
But…
While Chat GPT can generate text, we don’t recommend that you solely rely on an AI language model to draft any type of legal document. Drafting a legal document requires a thorough understanding of legal concepts and terminology, as well as careful consideration of the specific circumstances and requirements of the parties involved.
Further concerns with using Chat GPT to create a contract include:
- Inaccurate information: The Chat GPT website specifically warns, “Chat GPT may produce inaccurate information about people, places, or facts.”
- No clarificatory questions: Chat GPT can’t ask any questions to make sure it truly understands what kind of output you’re looking for. As a result, it may only partially understand your request.
- You can’t ask “why”: We have many clients that review a contract and ask, “why did you draft this provision like you did?” Since you can’t ask an AI tool any follow-up questions, you may not understand your own agreement.
- Simplified text: In our experience with using Chat GPT, the contracts and other documents that it generates are water-downed versions of what a person truly needs.
AI language models like Chat GPT may be useful in generating certain sections of a legal document, such as standard terms and conditions or definitions, but it’s crucial to have a human lawyer review and edit the document to ensure accuracy, completeness, and compliance with applicable laws and regulations. In short, while Chat GPT can be a useful tool to assist in drafting a contract, it shouldn’t be used as a substitute for the expertise and judgment of a qualified lawyer.
Contact The McWilliams Law Group for Help
If you’re ready to take your current business to the next level, the lawyers at The McWilliams Law Group are here to help. We can help ensure that your operations provide you with the tax and liability protections that best fit your short- and long-term plans. Our attorneys work closely with business owners throughout Washington and California, providing individualized and strategic advice to help their businesses run smoothly. Contact us now and get the skilled business advice that you deserve.
