Agreement · Technology, Media & Telecommunications / IT Contracts

AI addendum: ownership of AI-generated output, training-data rights and AI-specific warranties (customer-side)

Customer-side addendum for any technology contract with AI features: who owns outputs, a no-training default for customer data with opt-in, retention and deletion, model-provider flow-downs, IP warranties and indemnities, human oversight, transparency, model changes and AI incidents.

Kind
Agreement. A contract between two or more parties.
Where it applies
Australia, European Union, United States
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 on 17 October 2026 against the 8 authorities it cites, for Australia, European Union and United States.
Version
1
Source
Written for this library

When to use it

Use when a client buys a SaaS, platform or services contract that includes generative AI or machine learning features, or when a vendor proposes to add AI features to an existing contract. Supplier-side fallbacks are marked as alternatives. For a short neutral form, consider the Bonterms or Common Paper standards instead.

How AI may be used

AI may draft first-pass clauses mapped to the vendor's technical description and compare vendor terms against this addendum. A lawyer settles ownership, training rights, warranties and indemnities, and checks the technical facts with the client.

AI may

  • Extract from the vendor's documentation the models, hosting locations, retention periods and sub-processors to complete Annexure A.
  • Compare the vendor's AI terms with this addendum and list each gap, with clause references.
  • Draft plain-English explanations of the training and ownership options for the client.

AI must not

  • Must not assume technical facts (no training, zero retention, data location) that the vendor has not confirmed in writing.
  • Must not upload the vendor's confidential security documents or the client's data to a tool that trains on inputs.
  • Must not advise whether copyright subsists in particular outputs; that needs the lawyer's analysis of the human contribution.

The lawyer checks

  • Annexure A matches the vendor's written confirmations and the actual configuration.
  • The training and retention position is consistent with the client's privacy notices, APP 6 and APP 8.
  • Any EU AI Act obligations are assessed against the dates in art 113 as amended by Regulation (EU) 2026/1744.

Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.

Authorities

Read the full text

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