Relying on ChatGPT For Contracts: A Risky Legal Move

Using ChatGPT for contracts


It is undeniable that ChatGPT has led to a dramatic shift in society’s understanding and use of artificial intelligence.

However, how much should we trust ChatGPT in certain aspects of our life? In particular, many people now consider ChatGPT to be a viable avenue for creating contracts and other legal documents.

Nonetheless, there are several risks involved with using ChatGPT for these purposes and we would always recommend engaging a lawyer to draft and review contracts for you.

This article will explore the risks involved with having ChatGPT create contracts for you and why using a lawyer should be the preferred method.

ChatGPT’s Response

In the first instance, we actually asked ChatGPT whether it should be used to draft contracts:

“While I can assist in generating contract templates and providing general guidance, it’s crucial to have a qualified lawyer review and finalize any legal documents. Lawyers possess the expertise to ensure contracts are legally sound, tailored to your specific needs, and compliant with relevant laws and regulations.”

We support this viewpoint and note that whilst ChatGPT can provide examples and templates of contracts, they are unable to provide the several advantages that engaging a lawyer has.

We then asked ChatGPT why a lawyer is better to draft a contract and it provided 6 reasons and noted that ChatGPT cannot replace “the nuanced judgement, expertise and personalised advice that a qualified lawyer can offer”. The 6 reasons ChatGPT provided were:

  1. Legal expertise;
  2. Personalised advice;
  3. Risk assessment;
  4. Legal updates;
  5. Negotiation skills; and
  6. Enforcement and Dispute Resolution.

We will explore these 6 reasons ourselves (without the assistance of ChatGPT).

Legal Expertise

Any lawyer that you deal with at LawBase or in general, has undergone years of extensive and ongoing training and education.

Part of this education and ongoing development includes learning the nuances of contract law which enables lawyers to anticipate any issues that may arise as a result of a contract.

Most importantly, a lawyer can also advise you and ensure that the contracts you are either preparing or are entering into are comprehensive, suit your circumstances and are most importantly, enforceable.

Personalised Advice

Most contracts generated by ChatGPT are general in nature and can often be considered template contracts.

When engaging a lawyer to prepare a contract, not only can they prepare the contract with your specific circumstances and requirements in mind, they can also provide personalised advice to you in relation to how you may use the contract.

Risk Assessment

As previously touched on, part of a lawyer’s training, ongoing development and education in the legal profession enables them to be able to assess potential risks that may arise or be associated with the contract that you require.

Additionally, whilst being able to assess potential risks, lawyers are also able to provide strategies to mitigate such risks. These potential risks and mitigation strategies may not be clear to those without legal training or to ChatGPT.

Legal Updates

The law is constantly evolving. One of the key problems with ChatGPT is that it is a language model that only draws on information and data that was collected up until January 2022. This means that any contract drafted by ChatGPT only considers laws and regulations that were in place prior to January 2022.

Comparatively, lawyers are required to stay up to date with the latest legal developments and will ensure that any contract that they prepare is complaint with these standards.

In many instances, it will also be your lawyer who contacts you to inform you that your contract may need to be reviewed and amended to comply with new legislation.

Negotiation Skills

Whilst ChatGPT may be able to prepare a contract template for you, the preparation of contracts often involves several negotiation stages.

ChatGPT cannot take part in these negotiations for you. Instead, it will be a lawyer who represents your interests in these negotiations and who will advocate on your behalf to ensure that the contract is favourable to you.

Enforcement and Dispute Resolution

Similarly to negotiation skills, if a contract dispute was ever to arise ChatGPT cannot act on your behalf and in these circumstances, it can be invaluable to have the guidance of the lawyer who drafted the contract.

A lawyer would be able to interpret the contract and its terms, advise you on the best course of action and be able to represent you in any enforcement or legal proceedings that you may choose to undertake, or alternatively that are being brought against you.

Using ChatGPT for contracts


Overall, the experience and advice that a lawyer can provide to you is invaluable and incomparable to the templates that ChatGPT can provide.

Whilst we know that many have turned to ChatGPT in order to save time and costs, you must consider whether this short-term saving is beneficial when documents created by ChatGPT are not necessarily protecting you from any future disputes that will cost you more in the long run.

The information in this article is for general purposes only and you should obtain professional advice relevant to your specific circumstances.

Get in touch

If you or someone you know wants more information or needs help or advice in preparing a contract, please contact us.

1300 149 140 Contact us

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