Clause · Commercial & Corporate Advisory
AI use, disclosure, data-training and output-warranty clause for commercial contracts
Drop-in clause for services and supply contracts that requires disclosure of AI use, stops customer data being used for model training, sets human review and incident duties, and allocates risk in AI outputs.
- Kind
- Clause. Wording to drop into a longer document.
- Where it applies
- Australia, European Union, United Kingdom (England and Wales)
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked against the cited sources on 17 October 2026.
- Version
- 1
- Source
- Written for this library
When to use it
Use in services, outsourcing, marketing and technology contracts where the supplier may use AI tools on customer data or to produce deliverables. Choose customer-favourable or supplier-favourable alternatives to suit the client. For high-risk uses, add sector-specific terms.
How AI may be used
AI may generate customer- and supplier-favourable variants and check consistency with the main contract. A lawyer chooses the risk allocation for the client.
AI may
- Produce customer-favourable and supplier-favourable versions of each sub-clause
- Check that defined terms and liability caps match the main agreement
- Draft the AI register schedule from the supplier’s tool list
AI must not
- Must not decide which party bears the risk of infringing or inaccurate outputs
- Must not state that copyright subsists in AI-generated material without lawyer review
- Must not insert the counterparty’s confidential tool list into an unapproved AI tool
The lawyer checks
- Indemnity and warranties fit the overall liability regime and insurance
- Training restriction covers the supplier’s subcontractors and model providers
- Unfair contract terms risk checked if the contract is a small business standard form contract
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Commercial & Corporate Advisory
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- ASIC Form 484: change to company details (officeholders, addresses, members and shares)
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- Mutual confidentiality agreement (Australian law) with AI-tool use restrictions
- Board paper and resolution approving adoption of an AI system (risk, accountability, monitoring)
All precedents for Commercial & Corporate Advisory · Tasks and AI use in this area