The Ins and Outs of AI Contract Generators
AI contract generators are a type of software that drafts contracts through the use of machine learning and natural language processing. They help users create legally-compliant contracts by walking users through a series of questions and inputs related to the terms of the contract. The user is presented with a set of outputs that are then curated by the AI tool . The AI provides the user with a contracting document based on the terms and conditions as inputted by the user and any additional information on the parties, industry, jurisdiction and the like then provided by the AI.
Free AI contract generators can help democratize access to justice, allowing for small businesses and start-ups to have access to common legal documents without incurring huge expenses. Global policymakers, including the OECD and EU, have recently noted the potential of free AI contract generators in providing an alternative for citizens with limited means.
The Most Effective Free AI Contract Generators
The past few months have been busy ones for AI Contract Generation companies. The functionality of these tools are rapidly evolving and improving. Beyond the best free generators that are listed below, some of the paid AI contract generators such as LexCheck’s Contract Companion and LawGeex have made huge leaps in quality and accuracy especially for NDAs and for redacting contracts. The list of AI contract Generators continues to grow as each type of contract niche is being identified.
Here are the best free AI contract generation tools that we have found: Details: LawDroid is a fully hosted contract generator that makes some interesting uses of AI. You can use it right away or it can be branded as a white label offering on your firm or company’s website. It focuses on one off contracts (such as an NDA) as opposed to contract management platforms. Contracts created in LawDroid are saved and/or emailed.
Details: Juro is a contract automation platform that was designed to improve efficiencies for in-house counsel and includes integrated communication and workflow tools as well as the ability to search and amend contracts. Juro offers a 14 day free trial. After that you will need to request pricing.
Details: Woodpecker.ai is an MS Word Add-in. They have multiple verticals. You can create contracts relating to Employment, Nonprofits, or Real Estate. Their Real Estate Add-in has several types of contracts including lease to own contracts, land contracts, demand letters, lease agreements, and quit claim deeds. All contracts are saved locally on your computer with no ability to email or save on the cloud. We believe that they intend to add email functionality later this year. Right now it needs to be re-enabled every two weeks in Word without guidance from the company. We don’t understand why. The Add-ins are reasonably priced and do work.
Details: DocuSpike Legal’s AI contracts cover many practice areas and include Employee Contracts, Independent Contractor Agreements, Separation Agreements, Non-Disclosure Agreement, Commercial Lease Template, Terms & Conditions and Discovery Templates. The system saves all contracts created to your account but does not allow emailing or saving in the cloud. System is easy to use.
Details: GenDRA is a free NDA generator that leverages AI to create MS Word and PDF contracts with a log of all documents created and emailed. GenDRA was initially offered as a tool to users of their other product Docracy, but they have made it publicly available to all users recently.
Details: Contractmaker.ai generates a wide variety of one off contracts based on user inputs. It has a searchable database of US and EU precedents, but the AI technology it uses is not currently state of the art. They are working on adding additional feature that may make this a more robust platform.
The Benefits and Drawbacks of Free AI Contract Generators
The advantages and disadvantages of using free AI-powered contract generators can vary depending on a number of factors. One of the most notable benefits is that, as their name suggests, many are free to use. Although there are costs associated with signing contracts online, the cost of drafting the documents usually falls on the other party. This allows clients of law firms in particular to manipulate the process to reduce their overall costs.
Ease of use is another significant aspect of these tools. Many of them have user-friendly interfaces that guide users through the process of drafting a legal document by asking them questions and making suggestions at each step along the way. For example, some may ask in what state the agreement will be signed and include custom clauses for that jurisdiction by default.
Another big factor is customization. Most free contract generators allow users to customize any document they’ve created for their business or personal use. This means that they can edit it later on, helping to ensure it’s as useful as possible. Additionally, some sites allow users to save their documents in the cloud or download a PDF version of them. A few even allow users to request an online signature from anyone who intends to sign the document.
However, there are also a number of drawbacks. For starters, these tools aren’t legally binding even if they’re relatively easy to create and amend. While some can even be used to execute digitally, they’re not necessarily enforceable. Additionally, the terms and clauses they’re suggesting aren’t being reviewed by a solicitor beforehand. It’s important to confirm these agreements aren’t including any clauses that may not have been fully thought through or don’t comply with the law.
Finally, although these tools can be used for simple contracts, they’re not suitable for all. Such tools aren’t well-equipped to deal with complex situations; anything involving more than two parties may prove problematic. This is why it often pays to consult with a solicitor. They’ll be able to examine the contract language carefully and make adjustments based on their expertise.
How to Decide on Which Free AI Contract Generator to Use
When selecting a free AI contract generator, it’s important to consider several factors to ensure you’re choosing a tool that meets your needs. Here are some criteria to keep in mind:
User Interface: The user interface should be intuitive and straightforward. A clean design and easy navigation can save time during the drafting process, especially for first-time users.
Integration Capabilities: Look for a contract generator that can integrate with other software that you use, such as CRM systems, document management software, or e-signature tools. This will help streamline your workflow across platforms.
Legal Compliance: Make sure the contract generator complies with any relevant legal standards, such as GDPR, HIPAA, or industry-specific regulations. This is particularly important if you’re operating in a regulated field.
Customer Support: Evaluate how responsive and helpful customer support is. Free AI tools may have limited support hours, but email or chat support during business hours can be beneficial when you have technical difficulties or need guidance on using the tool.
Customization Options: Ensure that the contract generator allows for customization and edits, as most users will need to modify generated contracts to meet specific requirements.
Data Privacy: Review the provider’s terms and conditions and privacy policy to understand how your data will be used and stored. Consider whether you’re comfortable sharing that data with a third party before using the generator.
These are just a few of the factors to consider when selecting the right free AI contract generator for your needs.
Utilizing AI Contract Generators: Tips and Tricks
Each of the above-mentioned software programs have a few commonalities, so we will look to those here. Based on our testing of all AI generators, we have found that they tend to work best when you enter basic, simple information. The simplicity of what you enter can lead to the AI producing a focused and coherent contract which avoids many of the common pitfalls. A few tips: These guidelines should help you get the AI needs tailored to specific issues for your contract. This can also help limit the length of the document , which is often a problem when using an AI contract generator. We have also found that these programs are more useful for drafting standard contracts, such as a boilerplate or template agreements. While they can certainly draft custom contracts, the results may not be consistent. We have found a generic NDA or Sale Agreement easier to tailor to specific issues than an asset purchase or licensing agreement.
AI Contract Generators and Tomorrow’s Trends
As we look to the future, several trends in the world of AI contract generation stand out as likely to have a significant impact on the industry. These include the integration of natural language processing (NLP) and other advanced machine learning techniques, AI’s increasing role in automating not just the drafting but also the negotiation and execution phases of contracts, and the potential for more sophisticated collaboration tools enabling broader and more efficient use of AI contract generation systems.
NLP, which has become increasingly refined in recent years, is already being leveraged by some AI contract generators to further streamline odious tasks such as extracting key provisions or finding drafts that lack certain terms. These applications alone could save countless manhours. However, future possibilities include not only the ability to extract underlying data from the contract but, in many cases, reworking that data into a viable product. For example, AI may be able to make suggested edits to a contract that would improve its overall quality and likelihood of acceptance. As these technologies continue to advance, the effectiveness of the profession itself may rest on familiarity with AI tools and translations of those tools in a manner intelligible to a layperson.
The automation of negotiations has also seen great interest from the AI community. Though fraught with technical and ethical concerns, merging AI contract generation with more advanced automated negotiation systems may very well be a few years away from becoming the status quo. AI negotiation tools are already capable of predicting the likely outcome of a negotiated contract. Updating these programs to account for changes in a draft or a party’s strategy could soon lead to a system where lawyers need only present the initial position before leaving the rest of the back and forth to the computers.
Finally, we can expect AI contract generation tools to fall into the broader category of e-discovery and artificial intelligence machine learning analytical software. Like other areas of law, AI will increasingly be used to process large volumes of documents and propose solutions, including contracts. In the past, document reviews were limited to linear streams of data. However, e-discovery and contract drafting will be used in conjunction with predictive models to communicate vast data sets and proposed solutions that analyze everything from a single contract to entire libraries of drafts, and even millions of decisions by judges.
In the end, the use of AI contract generators will likely be just one cog in a much more complex and integrated enterprise. In a 2019 practice note, Practical AI for Contract Lawyers, the authors project that a law firm that adopts AI tools for contract review will likely do so more quickly, will manage contract review teams more efficiently, and will build and develop a prominence as an AI forward firm with a widely recognizable reputation within the AI community.
While adoption is now limited to those lawyers willing to spend an average of $100 an hour, the pressure to adapt will only grow as law firms continue to wrestle with the bottom line. As technology continues to leverage what were once human or proprietary skills, lawyers will find themselves increasingly in demand for the very qualitative skills that make them irreplaceable.
Creating Your First AI-Generated Contract: Getting Started
For those who have yet to try an AI contract generator, getting started is a breeze. The first step is to visit the preferred AI contract generator’s website. Most of the AI contract generators include a chat bot to assist you in creating your first contract. Once you’re on the webpage, you can chat with the AI contract generator to start drafting your first contract.
To get started, click the chat button on the bottom right corner of the screen. You will be taken to a chat window, the text of which may look something like this:
Introduction
I am an AI contract generator and I can help you create legal agreements.
I can create a variety of different types of contracts, including:
• Sales agreements
• Consulting agreements
• Non-disclosure agreements
• Loan agreements
• Purchase agreements
• Employment agreements
• Lease agreements
• General terms of service and privacy policies for websites
Next, the bot will ask for a few simple details about the desired contract, including what type of contract you would like to draft, as well as minor details necessary for the creation of the contract, such as names and addresses . You may also be able to choose the logic employed by the AI contract generator. Generally, you will be able to select the logic from choices such as vanilla or low risk.
The minor details about the contract are generally easy to input and will include the names of the contracting parties, the addresses of the contracting parties, the term of the contract, the jurisdiction in which the contract will be enforced, and the value associated with the contract. Thereafter, the AI contract generator will create the contract from the details provided in the chat.
If you have never used an AI contract generator before, we recommend trying out a few generators and comparing the results before proceeding with the custom contract.
