Small-business owners warm to AI-written contracts; lawyers warn of costly mistakes

SOME small-business owners in Singapore are using generative artificial intelligence (AI) tools such as ChatGPT to draft legal documents, but lawyers warn that the risks in doing so could outweigh any benefits.

Documents such as employment contracts and supply agreements could cost thousands of dollars if drafted in full by a lawyer. In contrast, the free basic version of ChatGPT can be used to draft these documents at no cost.

Yet, the quality of the AI output will depend to a large extent on the user’s own expertise and familiarity with the subject matter. The user will have to consider if he is comfortable with crafting the prompts and, if so, to do so carefully, said Andrea Chee, director at AEI Legal. “A key concern will be not knowing what one doesn’t know.”