AI Contracts: Key Clauses and How to Certify™ Them

Artificial intelligence (AI) is reshaping how businesses operate, and how they contract. From content generation to customer support, AI systems are increasingly embedded in SaaS, professional services, and even procurement. But with new capabilities come new risks. As federal and state laws evolve, and industry standards solidify, your contracts must evolve too.

Whether you're a sales professional closing AI-driven deals, a legal specialist ensuring compliance, or part of the procurement team evaluating vendor risk, AI contractual terms are now mission-critical.

In this guide, we cover essential AI contract considerations, including the rise of ai agreements, evolving regulatory pressures, and how TermScout's new Certify™ AI can help you lead with trust and transparency.

Why AI Contracts Require a New Playbook

Traditional software agreements weren’t designed for machine learning algorithms, adaptive outputs, or real-time data ingestion. With recent legislation such as the Colorado AI Act and California's AI Transparency Act, ai contract clauses must now cover:

• AI definitions and scope of use
• Training data sourcing and rights
• Output ownership and liability
• Bias testing and algorithmic accountability
• Regulatory compliance across jurisdictions

Failing to address these issues isn’t just risky, it slows down deals, erodes trust, and invites legal exposure. Businesses need contract certification solutions that proactively identify and certify AI terms for and compliance.

Core Clauses for AI Agreements

1. Defining Artificial Intelligence in Contracting

Clear, standardized definitions set the scope for risk, responsibilities, and compliance. Definitions should include:

• “Artificial Intelligence”
• “Generative AI”
• “Training Data” and “AI Outputs”

These definitions help manage expectations and ensure regulatory alignment, particularly under laws like the EU AI Act or U.S. state frameworks.

2. Ownership and Use Rights

Who owns the outputs? What can the provider do with your prompts? What protections exist if your data is used to train other models? Your ai contract should specify:

• Customer ownership of input data
• Licensing terms for AI-generated outputs
• Explicit restrictions on training with customer data

This is especially relevant for finance teams or any department handling sensitive data.

3. Bias, Transparency, and Accountability

AI systems can introduce or amplify bias. Contracts should include:

• Bias testing requirements
• Obligations to provide transparency into decision-making logic
• Commitments to update systems in line with future laws

For RevOps teams leveraging AI in pricing, hiring, or performance analysis, these terms are essential to reduce legal exposure.

4. AI-Specific Risk Allocation

Unlike traditional SaaS tools, AI evolves over time, producing outputs that may deviate from initial expectations. Protect your organization by adding:

• Indemnity clauses for AI-related liabilities
• Performance metrics for AI outputs
• SLAs for model accuracy, transparency, and retraining

These clauses are especially important for marketing teams using AI for public-facing content.

How Certify™ AI Works

TermScout's Certify™ AI combines contract intelligence, benchmarking, and analytics to assess and certify AI contract terms:

• Analyze: Identify and extract AI provisions from your contract
• Benchmark: Compare your terms to market standards and regulatory norms
• Certify: Earn a trust badge signaling that your AI clauses are clear, and compliant

This approach equips your contract solutions team with the data needed to improve trust, reduce delays, and accelerate deals.

Why Certify™ AI Matters Now

New federal and state policies are reshaping how AI clauses are drafted and enforced. Certify™ AI helps you:

• Accelerate contracting cycles by eliminating friction in AI terms
• Build trust with enterprise buyers wary of non-compliant language
• Stand out from competitors by proactively certifying your contract terms

Whether you’re selling AI products or purchasing AI-powered solutions, you need an independent way to demonstrate that your contractual AI terms are clear, compliant, and transparent. That’s exactly what Certify™ AI delivers.

Final Thoughts

As AI becomes more central to business strategy, your contract terms must evolve with it. Risk allocation, bias, data usage, and regulatory compliance are no longer optional, tlhey’re foundational.

Fortunately, with AI contract analysis and Certify™ AI, you don’t need to start from scratch. You just need the right data and the right partner.