Can I use AI to write a contract?

February 1, 2026

By Nadia Cabrera-Mazzeo, Esq.

Short Answer: You can probably use AI for a first draft, but not the final product.

I’ve had several clients come to me to review a contract that they wrote themselves using ChatGPT or another AI tool. Honestly, some of them are not that bad, but there has never been a case where the contract is, in my opinion, ready to sign. A lot depends on the quality of the prompts and the context that you give the AI. The main pitfalls of using AI to write a contract are:

•  Missing sections;
•  Incorrect application of state law;
•  Unclear or insufficient background information about the transaction.

Missing sections

It’s hard to know what sections are missing when you have not been trained in contract law. Some major sections that are commonly missing in DIY contracts, whether AI-assisted or not, include:

•  Indemnification (when, for example, Party A promises to protect Party B from liability for harm caused by Party A);
•  Termination (the conditions and process by which the parties can get out of the contract);
•  Governing law and jurisdiction (which state’s law governs the contract and where lawsuits must be filed if it gets to that point).

The AI, at least for now, is also not going to think through who the parties are, what their relationship is, how they actually function (vs idealized behaviors), etc. and how the contract should reflect these unique factors.

Incorrect Application of State Law

When prompting the AI, you may not have even mentioned what state the transaction is taking place in. That is important information for any contract, but even so, the AIs don’t have a great track record with recognizing what is actual law in a given state. I’ve found, for example, that they don’t know the difference between a bill and a law, and often find bills online that didn’t pass the legislature but say that the content of those bills is law. They also may throw in results from another state’s law.

Insufficient Background Information

When drafting any contract, you want to establish as much background information as possible. The AI is not a lawyer, so it won’t ask you for this information, but the information has a major impact on the content in the contract. Be mindful that, especially with free AI tools, what you tell the AI is not confidential. It’s one thing to willingly tell the AI, and its corporate creators, your own personal information, but it is another thing to give it someone else’s name, address, phone number, job title, etc. I would suggest you not input those aspects of the contract in the prompts, especially not without the other person’s consent.

So should you use AI to write a contract?

On the one hand, it can save you money to have a first draft that’s as comprehensive as possible for a DIY approach, regardless of what tools you used to get it there. In my practice, this usually plays out as a contract review service with $100-300 extra to strengthen the contract, beef up the protections, and get it to a place where it’s ready to sign. All told, the price is a lot less than
having me draft a custom contract.

On the other hand, if the first draft is not comprehensive, it is not worth doing the contract review service because I will have to write it all anyway. So the draft itself will have cost you unnecessary time and effort.

Law office of Nadia Cabrera-Mazzeo, Esq.

Small business and contracts lawyer

Based in Taos, serving clients throughout New Mexico

505 427 2025

nadia@honestcontracts.com

The information on this website is not legal advice and does not create an attorney-client relationship. The rates and fees listed on this website may not be the most up to date.