The rise of artificial intelligence has changed the way businesses operate. Tools like ChatGPT can draft marketing copy, summarize articles, and even help organize ideas for a proposal. For many business owners, the next logical question is whether the same technology can also review contracts. After all, contracts are text, and AI excels at analyzing text, so why not let ChatGPT handle the first pass of an agreement before sending it to an attorney?
It sounds efficient. But the truth is, ChatGPT cannot accurately review a business contract. It can describe what certain clauses appear to say, but it cannot evaluate what they mean in practice, how they interact with other terms, or whether they are enforceable under Texas law. Business contract review is a legal, strategic, and contextual process that depends on judgment, experience, and a clear understanding of your risk tolerance and objectives. Artificial intelligence simply isn’t equipped to make those calls.
Why Contract Review Is Not “Just Reading”
Many people imagine contract review as an editing exercise, checking definitions, highlighting fees, or catching typos. The truth is that reviewing a contract means mapping every provision against your business realities. A lawyer examines how the agreement distributes risk, how payments flow, what happens if performance fails, and which party bears the cost when things go wrong. It is a predictive exercise, not a mechanical one.
An attorney doesn’t just tell you what a clause says. They tell you how that clause will function if a supplier defaults, if a partnership dissolves, or if a customer refuses to pay. They assess how indemnity, limitations of liability, and warranty provisions interact, whether your remedies give you recourse, and how state law will interpret ambiguous terms. ChatGPT cannot do any of that, because it does not understand leverage, intent, or the sometimes messy business context that gives contracts their real-world meaning.
What AI Gets Wrong
ChatGPT can generate confident, polished explanations, but confidence is not competence. The model frequently misinterprets legal language, fabricates citations, or presents speculation as fact. Its answers may look convincing, but they often contain quiet inaccuracies that would be invisible to a non-lawyer.
- ChatGPT lacks the ability to weigh business context. The same limitation-of-liability clause might be acceptable in a low-margin service contract but catastrophic in a multimillion-dollar supply agreement. AI cannot assess where you can afford to concede and where you cannot. It doesn’t understand that a clause protecting a vendor might destroy your profit margin, or that a one-sided termination provision could leave you paying for months of work that never gets done.
- There’s also the issue of jurisdiction. Texas, like every other state, has its own body of case law that shapes how courts interpret indemnity clauses, non-compete restrictions, and liquidated damages. What’s enforceable in California or Delaware may not hold up in Dallas County. ChatGPT’s answers are drawn from broad public data, not current, jurisdiction-specific statutes or precedent. It cannot tell you whether a clause complies with state law or whether it will be enforceable when challenged.
The Risk of Overreliance
Perhaps the most dangerous aspect of using ChatGPT for contract review is that it sounds authoritative. The tone is confident, the logic appears clear, and the explanations are written in plain English. Business owners can easily mistake that fluency for accuracy. But if an indemnity or warranty clause is misunderstood, the result can be catastrophic: exposure to uncapped damages, responsibility for another party’s defense costs, or the loss of intellectual property.
There is also the matter of confidentiality. Even if you turn on privacy settings, uploading a contract into an AI system may expose sensitive commercial information—pricing, vendor relationships, or proprietary processes—to a third-party platform. That’s a data security risk no prudent company should take lightly, especially when those terms are covered by nondisclosure agreements.
What a Lawyer Adds That AI Cannot
Contracts are the backbone of every business. They control who gets paid, who bears risk, and who owns the result of the work. Those decisions should not be made by or using guidance from a tool that cannot interpret nuance or stand behind its conclusions. ChatGPT is not licensed, cannot be held to professional standards, and does not carry malpractice insurance. And when a contract fails, you cannot sue an algorithm.
When you hire a lawyer to review a contract, you are paying for perspective. An attorney knows how similar agreements are structured in your industry and which terms are negotiable. They know how courts have treated specific clauses, what words carry hidden implications, and where counterparties typically resist changes.
At Roquemore Skierski, our attorneys spend as much time understanding your commercial objectives as they do analyzing the text itself. We identify not just where risk lies, but what is worth negotiating. We help clients draft language that balances fairness and protection, terms the other side will accept without eroding your leverage. That judgment, earned through experience across industries and jurisdictions, cannot be replicated by artificial intelligence.
A Smarter Way to Use ChatGPT
That doesn’t mean AI has no role in the contracting process. When used correctly, it can complement legal review. ChatGPT can help you summarize long documents, organize negotiation points, or flag provisions for follow-up. It can prepare checklists or help you draft nonbinding correspondence. But those are support tasks, not legal advice. The contract review itself, the part that determines whether you are protected or exposed, must remain in human hands.
- A practical workflow looks like this: gather the facts of the deal internally, use AI to outline non-confidential points or prepare a general summary, and then engage your attorney for a focused review.
- Your lawyer can build on that efficiency, delivering a faster turnaround and a clearer analysis without sacrificing accuracy or accountability.
The Bottom Line
ChatGPT is a powerful tool for generating ideas and simplifying information, but it cannot reliably review the substantive legal or strategic aspects of a business contract. AI lacks context, accuracy, and accountability, three things every contract review requires. The right lawyer will give you all three.
If you need an attorney to review or draft a business contract, Roquemore Skierski offers flat-rate, attorney-led reviews that prioritize speed, clarity, and commercial sense. We help business owners protect their leverage before they sign, so they can focus on growing their companies rather than fighting preventable disputes later.
To discuss your contract or schedule a flat-rate review, call 972-325-6591 or contact us online. A short conversation today can prevent a much longer and far more expensive one tomorrow.
