AI-generated contracts: balancing productivity and risk
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AI is suddenly everywhere. It’s writing content, analysing data, and answering questions faster than most of us can type them. So it’s no surprise that one of the biggest trends we’re seeing is the rise of AI-generated contracts and agreements.
Honestly, I understand the appeal. As someone who has spent plenty of time helping customers refine their agreement templates, from the brilliantly simple ones to those that may be more confusing, the idea of AI turning a blank page into a contract in seconds sounds almost magical.
But here’s the truth we see every single day in Customer Success: A contract created quickly is only valuable if it’s created well.
Many AI-generated contracts look polished and professional at first glance. They read smoothly, they look tidy, and on the surface, everything seems in order. But it only takes a closer look to realise something important has been missed or misunderstood.
That is the quiet risk with AI in this space. When something looks clean and confident, it becomes far too easy to assume it must be correct. That polished finish can disguise mistakes, gaps or assumptions that would stand out instantly if a human had been part of the thinking.
Where AI adds value and where it does not
I’m definitely not saying you shouldn’t use AI. It can be incredibly helpful when used in the right moments, but it’s worth being clear about where it genuinely supports a process and where it can quietly introduce risk. Knowing the difference is what keeps things efficient rather than messy.
AI adds value when it helps you:
- Produce a first draft, so you’re not starting from a blank page
- Spot missing clauses or duplicated sections that might otherwise slip through
- Summarise long contracts into clear, digestible notes for quicker understanding
- Create consistent templates that save teams time and reduce rework
AI doesn’t add value when it tries to:
- Interpret the legal meaning or the intent behind an agreement
- Judge the fairness, balance or the long-term implications of a clause
- Ignore compliance differences between industries, regions or ways of working
- Generate confident-sounding inaccuracies that erode trust or cause confusion
Learning from real examples
A colleague of mine recently told me about a webinar she’d watched that shared a striking example of how AI can cause problems without anyone realising. A business had used a chatbot to create a referral agreement, and at first glance, everything looked exactly as you’d hope. The document was tidy, well-written and presented with the kind of confidence that makes you think the job is done.
The moment someone read it properly, the gaps were obvious. Key definitions weren’t included, the payment terms didn’t make sense, and the agreement even offered commission for people who never actually became clients. All issues that a human would have spotted straight away.
The problem wasn’t the writing style. It was the lack of human context. The AI had stitched together sentences that sounded perfectly reasonable, but it never paused to clarify the basics. It didn’t ask what the agreement was really supposed to cover, how the arrangement would work if situations changed or what a fair outcome should look like for both sides.
So it goes to show that while AI can absolutely help you get started, it cannot replace the questions, judgement and real-world experience needed to make an agreement meaningful and reliable. A contract is more than a collection of well-structured sentences. It needs the kind of understanding that only humans bring to the table.
How to keep AI safe and effective
AI can absolutely make contract work quicker and less daunting, as long as it’s used with the right guardrails. Here are a few simple ways to keep things safe, efficient and stress-free.
• Use AI for the heavy lifting, not the decision making. Let it create a first draft or structure, but keep the meaning and final choices in human hands.
• Add a quick review step. Even a short check from someone who understands the agreement will catch issues far earlier than fixing them after the fact.
• Start from approved templates. Ask AI to work within your existing templates rather than generating something from scratch, which reduces the risk of unexpected wording or missing essentials.
• Be wary of overly confident wording. AI writes with certainty, even when it shouldn’t. If something sounds a little too neat or polished, give it a closer look.
• Pair AI with tools that protect you. Secure eSignatures, audit trails and sensible user controls to keep your documents safe. Make sure your team only has the access they need for their role, so your sensitive information stays exactly where it should be.
Using AI in this way keeps the speed while protecting the clarity and trust that make contracts actually work.
Remember who the expert is
AI is fast, but it doesn’t understand your business, your customers or the expectations behind your agreements. That insight sits with you, and it’s what makes your judgement essential. AI can support the structure and speed, but it can’t replace the experience that builds trust.
Use it to eliminate repetitive work, but don’t let it decide what good looks like. When mistakes slip into a contract, they do more than delay a signature. They can create confusion and chip away at the confidence a customer has in your business.
Trust is what makes any agreement work. AI can assist the process, but you remain the expert. If you ever need a second pair of eyes or guidance, the Signable Customer Team is always happy to help you make sense of your templates and keep everything running smoothly.
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Ellie Yates
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