Potentiality of AI Technology for Practical Issues in Contract Drafting and Review

Abstract

Companies handle many kinds of contracts such as sales agreements and basic sales transaction agreements. During drafting, they ask their own legal department or advisory legal firm for a contract review. Legal officers in these organization provide comments on (1) an unfavorable term, (2) lack of a necessary term, (3) a typographic error, (4) an inappropriate use of legal terms, and so on, by referencing similar contracts. They conduct this inspection with their highly specialized knowledge and experience; however, we may face a shortage of manpower for contract review in near future because of birthrate decline and labor reform. Therefore, we develop a contract review support system that finds the issues above. We apply a rule-based solution for issues (1), (2), and (3) since many contract expressions and description rules are standardized. We apply a machine learning-based solution for issue (4) since using legal terms appropriately depends on context.