Five Reasons Why You Don’t Want to Use Artificial Intelligence to Draft, Review or Negotiate Your Construction-Related Agreements

Artificial intelligence (AI) is here to stay and will continue to impact the construction industry and all facets of how people do business. The fast-paced development of AI in both the construction industry and legal profession cannot be ignored. While AI can be a useful tool when used correctly, having experienced human interaction, oversight and accountability are key. AI may be able to generate fancy words on paper, but there is much more to drafting, reviewing, negotiating and providing meaningful legal advice in connection construction contracts, subcontracts and other construction documents. This article will discuss several reasons why a business should not rely on AI when drafting, reviewing or negotiating construction related agreements.

First, AI lacks the contextual understanding of “real” construction practices. AI systems operate based on patterns and data analysis but do not understand the contextual realities of the construction industry. The necessary understanding of the intent, specific industry requirements, and legal implications requires the interpretation, advice and expertise of a legal professional.

Second, AI lacks the ability to interpret ambiguities. One of the arts of drafting and reviewing construction contracts, subcontracts and other construction documents with legal effect is to understand the use and implications of ambiguous language. Contracts often contain ambiguous language, which AI may struggle to accurately interpret. Such ambiguities need to be addressed through human interaction and advice. Legal professionals are better positioned to provide the necessary context and advice in order to make subjective judgments.

Third, AI does not have a real-time understanding of the evolving legal landscape of the construction industry. Laws and regulations continuously evolve, and legal interpretations change over time through case law and legislative actions. However, AI models are trained on historical data, which is likely to become outdated. It is crucial to consult with a legal professional to make sure construction contracts, subcontracts and other construction documents with legal effect properly incorporate the latest legal developments in the construction industry.

Fourth, AI has no ethical or professional standards. AI provides printed language without the ability to explain the underlying rationale, which raises concerns about transparency and accountability. In construction matters with significant legal effect and risks, it is essential to have the oversight and responsibility of a legal professional to ensure compliance with ethical and legal standards.

Fifth, AI lacks flexibility and the ability to negotiate. Contract drafting and review often involves negotiations in addition to the ability to adapt terms and language based on various factors. While AI can assist in identifying standard clauses, the “one size fits all” approach is rarely achievable in connection with construction projects. The negotiation skills and flexibility of a legal profession are critical to achieving a construction contract, subcontract or other construction document with legal effect that protects a client’s specific interests and increases the likelihood the document is interpreted in the client’s favor in the event of a dispute.

AI is certainly transforming the construction industry by automating tasks and flagging potential issues. However, when it comes to drafting, reviewing or negotiating construction contracts, subcontracts or construction related agreements, human involvement and consultation of a legal professional is essential.

This article was originally published in Subcontractors Trade Association October 2024 Newsletter.