Best Practices
Leading Practices and Key Considerations When Contracting for AI: An AI & Emerging Technology Committee Briefing Paper
As artificial intelligence becomes increasingly integrated into third-party products and services, traditional contract terms may no longer be sufficient to manage emerging risks. This paper highlights key contractual and governance considerations for organizations seeking to strengthen oversight of AI-enabled suppliers. It outlines important issues to be aware of when evaluating AI-related engagements and preparing contracts that promote accountability, transparency, and regulatory alignment. Topics addressed include:
– The importance of distinguishing true AI capabilities from marketing claims
– Key differences in contracting based on how AI is used by the supplier
– Risks related to data rights, system transparency, and explainability
– Legal and regulatory implications under frameworks such as the EU AI Act
– The need for flexible termination provisions and ongoing audit rights