Modern technology has paved the way for multi-functional devices like smartphones and smartphones. Computers have become faster, more portable and expand in various forms such as AI, machine learning, Internet of Things,etc becoming more and more advanced than ever before. As it grows, it continues to expand its role in the life of humans as well as businesses.

One such instance is the use of AI in Contract Management by companies. Organizations have access to large quantities of online data, but many of them lack the necessary tools to unlock the value this information can deliver. Artificial Intelligence can help uncover data insights that allow them to manage their resources more efficiently and better serve their customers. By deploying AI technology an organization gathers the ability to save time and money by automating and optimizing routine processes and tasks, increase productivity and operational efficiencies, make faster business decisions based on outputs from cognitive technologies.

How AI works

According to Statistical Analysis System, AI works by combining large amounts of data with fast, iterative processing and intelligent algorithms, allowing the software to learn automatically from patterns or features in the data. AI is a broad field of study that includes many theories, methods, and technologies. Cognitive computing is a subfield of AI that strives for a natural, human-like interaction with machines. Using AI and cognitive computing, the ultimate goal is for a machine to simulate human processes through the ability to interpret images and speech – and then speak coherently in response.  

Using the same cognitive computing methods, AI has found its way in the contracts as well. Many companies have developed software to identify new clauses in a contract, segregate them, find other new elements of a contract, etc. The extracted information is then interpreted for determining risks, further negotiation and finding out other red flags in the contract.

But here is where the first problem arises, the way AI interprets the contracts. It interprets languages in a way that is fed in the system. However, there is no standard formula or method through which every contract is drafted. Language, style of writing, chronology of words and clauses, punctuations all differ from situation to situation in a contract and can completely change the meaning. As a result, the procedure in which AI is designed to translate the information maybe different from a contract that would come in its way. Any fault in the way it interprets this information could be disastrous and other party may even draft contracts in a way to exploit the limitations of these technologies and which would benefit its own client. A contract could be completely one sided contract but still make its way through without objections just because the AI did not interpret the information correctly. Thus. this very basis of working makes AI's entry into the field of legal contracts is very treacherous.

As mentioned before, the AI collects information and then interprets it to take decisions. Now these decisions are handled differently from organization to organization. Some organizations use this information collected from AI and take decisions on their own while some would allow AI itself to take the decisions. Now imagine a situation where it interprets the information collected incorrectly and then even given the power to take decision on these incorrect outcomes. Even if individuals take independent decisions, the question of reliance on these technologies will always be there and the tendency of malfunctions from these will always bear at the back of the head. And if an individual is set out to review the contract interpretation of AI then it loses the very motive to getting it on the first place. i.e, save time and cost. Therefore, overdependence of these AI could lead to inevitable risks.

What should be their role?

To understand the role, we need to analyze the strengths and limitations of AI over human lawyers. While AI is very commanding in terms of quick mathematical calculations, standard work and contracts of regular nature over humans, it can find its way in doing repetitive nature work. For example, the way Online shopping sites use these technologies to place orderfrom a consumer in case of Standard Contracts, a very standard job which however is very important and available in various aspects of law. While for complex tasks which requires human intellect like contract drafting and negotiation should be left with human beings and lawyers. There should be no room for it to take independent decisions due to the abovementioned reasons.Thus, AI must follow and must not lead.

What should be their role according to you? Comment down below to share your opinions.