We are gen­er­al­ly a very laid-back peo­ple. Un­for­tu­nate­ly, this par­tic­u­lar trait isn’t al­ways as wel­comed as we would like it to be. Gen­er­al­ly, as our his­to­ry would show, very lit­tle riles us up enough to ac­tive­ly at­tempt to ef­fect change or de­mand bet­ter. This laid-back ap­proach isn’t re­served on­ly for mat­ters of na­tion­al con­cern, but lends it­self to var­i­ous as­pects of our pri­vate lives. We adopt this ap­proach to busi­ness trans­ac­tions, mat­ters of health and oth­er per­son­al is­sues that may re­quire more than a nod of the head and a state­ment brush­ing off the is­sue as to­mor­row’s prob­lem.

Imag­ine for a mo­ment that you are at­tempt­ing to build a house. With our cur­rent eco­nom­ic con­cerns, the con­struc­tion of even a small con­crete home may run you well over half a mil­lion dol­lars. Cer­tain­ly not a small in­vest­ment for many of us. Yet, in ap­proach­ing con­struc­tion work, you will hire a con­trac­tor based on a rec­om­men­da­tion with no bind­ing con­tract be­tween you set­ting out the terms of their work, or hire a rel­a­tive be­cause, of course, fam­i­ly can do us no harm.

Al­most any­one who has had to un­der­take con­struc­tion work can at­test that con­trac­tors (even the ones we are re­lat­ed too) are no­to­ri­ous­ly un­re­li­able. Con­trac­tors usu­al­ly have sev­er­al projects be­ing done con­cur­rent­ly and would some­times ne­glect your work. This can af­fect com­ple­tion dates, re­sult­ing in all forms of in­con­ve­nience.

Aside from con­struc­tion work, there are many peo­ple who now pur­chase ve­hi­cles on terms. These ve­hi­cles are be­ing sold for con­sid­er­able sums, yet there are no writ­ten agree­ments that in­di­cate the terms of the sale or, more im­por­tant­ly, prop­er­ly out­line that the pur­chas­er is al­lowed to have im­me­di­ate ac­cess and use of the ve­hi­cle.

The down­side of this, which many peo­ple do not con­sid­er, is that the own­er, be­ing the ven­dor, still owns the ve­hi­cle and has the ben­e­fit of all nec­es­sary doc­u­ments.

On the flip side, the pur­chas­er, who is dri­ving around in the ve­hi­cle, has no doc­u­men­ta­tion ev­i­denc­ing their law­ful use. It has be­come al­most com­mon to have pur­chasers re­port their ve­hi­cles stolen and de­mand it be re­turned to them.

When these arrange­ments be­come sour and par­ties reach a stale­mate, le­gal ac­tion be­comes their on­ly re­course. Imag­ine le­gal ac­tion where nei­ther par­ty agrees on what the terms of the trans­ac­tion were, what the pur­chase price or con­struc­tion cost was and has no doc­u­men­ta­tion as ev­i­dence of their agree­ment.

In in­stances like this, the court must de­ter­mine the terms of an oral con­tract with both par­ties putting for­ward dif­fer­ent ver­sions of the arrange­ment.

Now think about it rea­son­ably. A $500,000 in­vest­ment pro­tect­ed by a $1,000 agree­ment draft­ed and vet­ted by peo­ple who are ex­pe­ri­enced in do­ing so. Now, I am not in­di­cat­ing that you can walk in­to any at­tor­ney’s of­fice and get an agree­ment for $1,000, but I have no doubt that af­ter a few phone calls, it is easy to find le­gal ad­vice that you are com­fort­able with that fits your fi­nan­cial abil­i­ties. I have grown ac­cus­tomed to peo­ple con­fi­dent­ly ad­vis­ing that they are tech-savvy enough to have AI gen­er­ate agree­ments for them and as such, elim­i­nate the need for any fur­ther ad­vice.

It will take too long to de­bate the lim­its of an AI-gen­er­at­ed agree­ment. But let me sim­ply pro­vide a quick Google overview on whether AI can gen­er­ate a le­gal agree­ment:

“Yes, AI can draft agree­ments by gen­er­at­ing first drafts, sug­gest­ing claus­es, and au­tomat­ing rou­tine con­tract cre­ation based on user prompts and vast le­gal da­ta, sig­nif­i­cant­ly speed­ing up the process. How­ev­er, these AI-gen­er­at­ed doc­u­ments of­ten lack crit­i­cal le­gal judg­ment, con­text, and tai­lored busi­ness nu­ance, mean­ing a hu­man lawyer must re­view and re­fine them to en­sure they are legal­ly sound, ac­cu­rate, and meet spe­cif­ic needs, as AI cur­rent­ly aug­ments, not re­places, le­gal ex­per­tise.”

Yes, I sup­pose AI can draft an agree­ment for you. But, should le­gal ac­tion be­come nec­es­sary, are you sure the agree­ment would con­tain the nec­es­sary claus­es re­quired to pro­tect your in­ter­ests? Will AI be aware or able to ad­vise you on your par­tic­u­lar is­sues and sit­u­a­tion? No, I don’t think an AI agree­ment of­fers the pro­tec­tion that would be re­quired.

When con­duct­ing busi­ness re­quir­ing sub­stan­tial fi­nan­cial in­vest­ments, whether the in­vest­ment is time, mon­ey, or some­thing else of sig­nif­i­cance, prop­er doc­u­men­ta­tion should al­ways be a re­quire­ment and not sim­ply a con­sid­er­a­tion.

Keep­ing records pro­tects par­ties from some­times un­fore­see­able harm or loss. We can­not al­ways re­ly on a gen­tle­man’s hand­shake or fa­mil­ial re­la­tions; many times, much more is re­quired.

Agree­ments or the writ­ten word can prop­er­ly set out terms that the par­ties are aware of and en­sure both par­ties are op­er­at­ing with the same un­der­stand­ing.

Prop­er agree­ments al­so have the added ben­e­fit of giv­ing the court the agreed terms and clear ev­i­dence of where breach­es would have oc­curred. Start keep­ing writ­ten records.