Using AI Without
Updated Contracts
Is Unlimited
Liability.
Companies worldwide are deploying AI in their products and operations with T&Cs, employment agreements, and vendor contracts that are dangerously exposed. When something goes wrong, the liability lands entirely on you.
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✕AI Output Liability DisclaimerNo clause limiting liability for AI-generated content. You own every output your product delivers.
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✕Employee AI Acceptable Use PolicyNo restrictions on staff use of external AI tools. Client data is likely already in third-party models.
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✕AI Vendor IndemnificationVendor agreement does not indemnify you for downstream AI errors. Harm flows upstream to you.
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✕Customer Data Use by AI SystemsT&Cs do not disclose that customer data may be processed by AI. Potential breach under GDPR, PDPA, and equivalent data laws.
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!IP Ownership of AI-Generated WorkUnclear who owns outputs produced by AI tools used in your business. Dispute risk with clients and employees.
These Companies Faced Massive AI Fines. They Didn't See It Coming.
Every one of these penalties was issued under existing law data protection, consumer protection, anti-discrimination. No AI-specific regulation was required. The legal framework to hold your business accountable already exists.
The world's first dedicated AI regulation is now law. Its penalties exceed even the GDPR fines of up to €35 million or 7% of global annual turnover, whichever is higher.
If your business operates in or serves customers in the EU, you are in scope. And every other major jurisdiction is moving to follow suit. The question isn't whether regulation is coming , it's whether you'll be ready when it does.
Common Startup Scenarios Where AI Contracts Go Wrong
Founders Used LLM to Draft Shareholder Agreement
Ambiguous terms led to dispute over equity vesting. Stuck in court for 18 months.
SaaS Contract Negotiated with LLM
Client terminated due to unclear termination clauses. No protection for recurring revenue.
Contractor Agreement Generated by AI
Unclear IP ownership led to contractor claiming ownership of core product features.
Our contract review and drafting bundles range from 6-10 hours a fraction of the cost when things go wrong.
View Contract Bundles →The AI Gap in Your Agreements Isn't Theoretical, It's Immediate
Most businesses believe they are protected because they have contracts in place. They are not. Contracts written before the AI era address a world that no longer exists.
You're Offering AI to Customers
Your product uses a large language model. Your T&Cs still describe software. When that AI gives a customer incorrect financial, medical, or operational guidance and they act on it, you are the liable party. No AI disclaimer exists in your agreements because you never drafted one.
Your Employees Are Using AI at Work
No policy means no boundary. Right now, your staff are feeding client data, trade secrets, and confidential strategy into third-party AI tools. Your employment agreements were written before any of this existed. You have no legal recourse if that information is leaked, reproduced, or misused.
You're Relying on AI Vendors
Your vendor built the model. But your vendor agreement doesn't indemnify you for what that model does. When their outputs cause harm hallucinations, biased decisions, wrong recommendations, the liability doesn't stay with the vendor. It flows upstream, to the company that deployed it. That's you.
An AI Tool Generated That Contract.
It Cannot Tell You It Won't Hold Up.
Businesses worldwide are now using ChatGPT and other AI tools to generate or review their contracts. The output looks professional. The language sounds legal. And it is completely unverified against your local law, your industry's regulatory requirements, or the specific facts of your business.
AI can produce a clause that sounds like it limits your liability for AI outputs. It cannot tell you that clause may be unenforceable under your jurisdiction's consumer protection law or that it creates a conflict with indemnification obligations you already have to a key customer.
This is the difference between a document and a legal opinion. LDU provides the latter industry-specific, jurisdiction-aware, and informed by how these clauses actually perform when challenged.
- ✕ Does not define "AI systems" scope may be unenforceable under your local contract law
- ✕ Blanket exclusion clauses face reasonableness or fairness tests globally (UCTA, EU Unfair Terms Directive, consumer protection law) fails for consumer-facing products
- ✕ No carve-out for wilful misconduct creates total immunity language courts routinely reject
- ✕ Does not address data protection obligations (GDPR, PDPA, CCPA) for personal data processed by AI
- ✕ AI tool has no knowledge of your existing agreements, new clause may conflict with obligations already in place
Start With a Free Call. Leave With Clarity.
You Tell Us How AI Features in Your Business
In 15 minutes, a qualified lawyer reviews your situation, the tools you use, how they're deployed, what jurisdictions you operate in, and what agreements are currently in place. No forms. No generic checklist.
On-call, no obligationWe Map Out Your Exposure
We review your T&Cs, employment agreements, vendor contracts, and privacy policy against a current AI risk framework, allowing you to understand what's exposed and how urgently.
Written risk audit reportNo Pressure. You Decide What Comes Next.
After the assessment, you leave with a clear picture of your exposure. If you want LDU to run the full audit and build your protections, we'll scope that separately. You are never obligated to proceed.
Zero commitment required15 Minutes. A Qualified Lawyer.
A Clear Picture of Your Exposure.
No obligation. No generic checklist. Tell us how AI features in your business we'll tell you exactly where the risk sits.
No commitment required. All conversations are confidential and subject to legal professional privilege.
If Any of These Describe You, You're Exposed
SaaS & Tech Companies With AI Features
Your product uses an LLM, a recommendation engine, or AI-generated content. Your T&Cs still describe a conventional software product.
Employers Whose Staff Use AI Tools
Your team uses ChatGPT, Copilot, or similar tools in daily work. Your employment agreements have no AI use policy, no data handling clause, no IP assignment provision.
Regulated Industry Companies
You operate in finance, healthcare, HR, or legal services sectors where AI outputs carry specific regulatory risk. A generic disclaimer provides zero protection.
Businesses Using AI Vendors
You rely on a third-party AI platform to deliver services to your customers. Your vendor agreement almost certainly doesn't indemnify you for what their model does.
What AI Can't Do That Your Legal Exposure Demands
| AI-Generated Contracts | LDU Legal Counsel | |
|---|---|---|
| Jurisdiction compliance | Not verified generic output with no local law grounding | ✓ Drafted to the laws of your operating jurisdiction(s) |
| Industry-specific clauses | No same output regardless of your sector | ✓ Tailored to fintech, healthcare, HR, SaaS, and more |
| Awareness of your existing agreements | None new clauses may conflict with obligations you already have | ✓ Reviewed against your full contract stack |
| Enforceability testing | No AI cannot assess how a clause performs in litigation | ✓ Informed by how these clauses hold up when challenged |
| Data protection alignment | No GDPR, PDPA, CCPA obligations require separate legal analysis | ✓ AI liability and data compliance addressed together |
| AI legislation readiness | No AI tools cannot assess your obligations under new AI-specific law | ✓ Assessed against AI legislation and emerging global frameworks |
| Professional indemnity | None AI tools accept no liability for the advice they give | ✓ LDU carries professional indemnity insurance |
Most Companies Find Out
They Were Exposed
The Hard Way.
The ones who don't called a lawyer first. Your AI is already deployed. The question is whether your contracts caught up.