Electronic Contracting Internet Law & Cybersecurity Canada Artificial Intelligence

• “When a client is acquiring an AI product/service, where do you begin in your legal review? This article discusses key issues to consider and strategies for risk mitigation.
• Due diligence on the prospective vendor is a must. It is key to understand the nature of the AI application and its intended use, from whether the product/service is consumer-focused or for business-to-business use to the scope of its source data.
• Ask detailed questions to assess the risk of biased output and to evaluate privacy/cybersecurity practices, particularly use of your client’s personal information. Review the draft contract to ensure your client has necessary use rights and rights to intellectual property.
• Many standard AI contracts include minimal legal representations and warranties and include reverse indemnities from the client. Seek to include express reps and warranties on key issues, minimize client indemnities, and add critical vendor indemnities. Also look closely at dispute resolution and termination provisions.”