Q1 Is there scope to use AI in commercial contracts? Will it save time, or ultimately cost more time in review and pose greater risk?
The use of AI in commercial contracts is becoming universal. There are so many benefits to using AI, especially when there is a deal happening and time is critical to prepare and circulate draft versions to various parties involved to build momentum very early. Many instances, parties must wait for first draft versions if manually drafted. AI is of great use and benefit here. By its speed, it can help in making deals happen quicker and avoid waiting time which can be detrimental in important commercial matters. Not only can AI help in the first draft but also in making changes in the draft later. It is even better used when the changes are repetitive across the various agreements.
At the first draft stage, it speeds up things and works very well with terminology and consistency within the contracts. Nowadays, it is getting more and more accurate, and you can even prompt it to include specific laws and regulations. These are marvelous tools which never existed before. It avoids the use of templates which probably do not fit. When you consider that with AI not only helps a lot in drafting but also manages the different versions, but also has real time features of editing and managing amendments, it represents a great step forward. It helps in achieving success, however, it is clear that you cannot solely rely only on AI. Expert legal review is a must That judgment are sine qua non to ensure that the commercial contract meets all the goals and checks all the boxes. Those drafters who have their own style may not be happy with AI, as it may change the whole style which may tend to make them do a lot of amendments whilst reviewing. However, if they accept certain parts of AI drafting, they will find it extremely useful.
Q2 Is technology making due diligence easier or harder? Is the volume of available data overwhelming or useful?
Due diligence is a process which is now in the DNA of any client relationship, from onboarding and throughout. You cannot do away with it. This exercise takes a lot of time and resources especially if the numbers are huge. Nowadays, technology is a major component of a due diligence process. The automated process helps with speeding repetitive tasks of data collection and analysis. Automation helps reduce human error, is more accurate and can be standardised. Not only that, but technology is also so advanced nowadays that you can integrate various technologies (known as API) with each other making it even more useful and time saving. Technology can analyse large volumes of data, identify patterns and risks and do continuous monitoring. Take for example, when a client is being onboarded, technology checks on the name if there are hits or issues on this or similar names. If there is any issue, it gives you the details. Not only that, but technology can also perform biometric checks on identity documents uploaded by clients to verify them. This cannot be done manually as new developments happen, technology will plug in more and more features to help in due diligence process. Now, with technology you can end up with a lot of data. This can be both useful and overwhelming. The volume of data will become cumbersome if proper tools and process are not used to focus on the relevant data. This is important or else, there can be irrelevant data which require to be discarded delaying the due diligence process or getting a misleading report. If proper tools are used, technology will sift through the data and give you tremendous output.
Q3 What legal risks are emerging in your jurisdiction stemming from developing commercial and consumer technology?
As commercial and consumer technologies emerge, they do come with the inherent legal risks that are worth considering. This is not only in Mauritius but any other jurisdiction. As mentioned earlier, technology uses a lot of data including personal data. How is the data used is very important. Any misuse can lead to data breaches. In Mauritius we have data protection laws following the EU General Data Protection Regulation (GDPR) such as the Data Protection Act 2017. Any breach involves regulatory fines and liabilities. Secondly, technology used in certain areas are critical. In some instances, there is a great reliance in technology, for example healthcare or automation of processes whereby there is a heavy reliance on AI. When AI becomes an agent rather a tool, this creates many risks.
In conclusion, the integration of AI and technology in the realm of commercial contracts and due diligence has created a positive transformation. While AI accelerates the drafting and management of contracts, human expertise remains indispensable. Technology, through automation and APIs, has revolutionised due diligence, allowing for more thorough and accurate data analysis. However, with these advancements come inherent legal risks, such as data breaches and the need for vigilant monitoring of AI when it acts as a decision-making agent. It is imperative that we harness the power of technology responsibly, whilst being aware of its limitations.
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