AI clauses in a client contract when you deliver AI-assisted work

A business that uses AI tools to produce what it sells its clients (reports, designs, code, copy, analysis) has a client contract written before the tools existed: it assigns intellectual property the business may not own, warrants originality the business cannot check, promises confidentiality a tool provider's terms may breach, and says nothing about disclosure. The AI clauses fix each of those in the supplier's favour while giving the client something it can accept. The agreement's AI provisions come back drafted or reviewed within five working days for a fixed £595.

Who this is for

Agencies, consultancies, developers, writers, designers and any business in England and Wales that delivers work to clients with the help of AI tools and has a client contract that does not mention them.

What matters in AI clauses for a client contract

The disclosure clause and the client who finds out later

The clause states that the supplier may use AI tools in producing the deliverables, names the categories of tool, says that outputs are reviewed by the supplier's staff before delivery, and provides for specific disclosure where a deliverable is substantially generated, so that a client who signs has agreed in advance and the discovery of generated material is not a dispute; a client that wants no AI on its work can say so, and the clause gives it the mechanism (a written restriction, with the supplier's price and timetable adjusted), which is better for the supplier than a prohibition it did not know about.

Ownership of deliverables with generated elements

under the Copyright, Designs and Patents Act 1988 the author of a computer-generated work is the person who made the arrangements (section 9(3)), a rule untested on modern tools, and only original works are protected; the standard assignment of intellectual property in deliverables therefore needs rewording so that the supplier assigns what it owns (its own work and whatever rights it has in generated elements, with the tool's output terms checked), licenses the client to use generated elements the supplier cannot assign, carves out the supplier's pre-existing materials and know-how, and states that the parties recognise some generated elements may not attract copyright, with the client told rather than left to assume.

The warranties a supplier can give and the ones it cannot

The supplier can warrant that the deliverables are its own work save as disclosed, that it has reviewed generated elements for recognisable reproduction of third-party material, that it has used tools under terms that do not grant the provider rights in the outputs, and that it has complied with the client's stated restrictions; it cannot warrant that generated elements are original in the copyright sense, that no third party will claim, or that a tool's output is accurate beyond the review applied; the clause draws that line in terms a client's procurement team recognises, and the non-infringement warranty and indemnity are limited to the supplier's own work and the generated elements it has checked and disclosed.

Confidentiality and the client's material in the supplier's tools

confidential information, clients' data and trade secrets are kept out of tools whose terms permit retention of inputs or training on them, because both the Trade Secrets (Enforcement, etc.) Regulations 2018 and the business's confidentiality obligations ask what steps were taken to protect them; the client contract's confidentiality clause usually prohibits disclosure to third parties, and a tool provider is one, so the clause permits the supplier to process the client's information in AI tools that meet stated conditions (business terms, no training on inputs, limited retention, security, a data processing agreement where personal data is involved), treats that as a permitted disclosure, and prohibits everything else; putting personal data into an AI tool is processing under the UK GDPR, so it needs a lawful basis, transparency to the individuals, an Article 28 agreement with the provider and, for uses that affect people, an Article 35 impact assessment, and the client's DPA with the supplier must permit the tool.

The client's own restrictions and the clause that asks

Some clients' procurement policies prohibit AI on their material, some require named tools, some require disclosure in every deliverable, and the clause asks the question at contract stage: the client states any restriction in a schedule, the supplier prices and plans accordingly, and a restriction imposed later is a change request; the clause also deals with the client's own use of AI on the supplier's deliverables (the supplier does not warrant deliverables the client has altered with tools) and with the client's data given to the supplier (the client warrants it may be used, including in the permitted tools), because the client's own failures should not become the supplier's claims.

Liability, indemnity and the cap for generated work

Liability for generated elements sits within the contract's general cap, the supplier's indemnity for infringement is limited to its own work and the generated elements it has checked and disclosed, claims arising from the client's restrictions not being stated or the client's data not being usable are excluded or indemnified by the client, and the supplier's insurance is checked for exclusions of AI-assisted work (which some policies now contain); the contract's entire agreement and no-reliance clauses are updated so that pre-contract statements about the tools do not become representations, and the supplier's AI use policy, drafted separately, is what makes the clauses true in practice.

What it costs

AI provisions in a contract, £595. Review or draft AI-specific terms in a supply or customer agreement. Five working days.

AI use policy, £995. Internal policy plus the accompanying contract provisions. Five working days.

Email me at geoffrey@caesar.co.uk with what you need and any documents, and I will confirm the scope and the fee in writing, usually the same working day.

What you get

• An internal AI use policy your staff will follow, rather than a document that bans everything and is quietly ignored
• Contract provisions covering output ownership, training data, confidentiality and liability
• A defensible position to give customers who ask what your AI governance looks like
• Review of your AI suppliers' terms, including what they reserve the right to change
• Practical guidance on what to permit, what to restrict and what to prohibit outright
• One round of amendments

What is not included

• Technical AI assurance, model testing or bias auditing
• Sector-specific regulatory approval
• Advice on non-UK regulatory regimes beyond flagging where they apply
• Ongoing regulatory monitoring

Questions I am often asked

Do we have to tell clients we use AI tools?

A standing disclosure in the contract is the safer course: the client has agreed in advance and the discovery of generated material is not a dispute. Specific disclosure follows where a deliverable is substantially generated or the client's restrictions require it.

Can we still assign the IP in our deliverables?

What you own: your own work and the rights you have in generated elements under the tool's terms. The clause assigns that, licenses what cannot be assigned, and tells the client that some generated elements may not attract copyright.

What if a client's own terms prohibit AI?

The clause asks at contract stage and treats a restriction imposed later as a change request. A restriction you accept is priced and planned for; one you did not know about is the breach the clause prevents.

Related guidance and services

• AI contracts and AI use policies, £595, the service this page describes
• SaaS and technology contracts, £995
• Data protection agreements and privacy terms, £795
• AI use policy for a consultancy
• AI-generated content disclosure in customer contracts

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.