AI-generated content disclosure in customer contracts

A business that uses generative tools in what it delivers has to decide what it tells customers, and the decision is not a matter of taste: a contract may require disclosure, a regulator or platform may require a label, and a deliverable presented as something it is not is a misrepresentation. The right approach for most businesses is a standing disclosure in the contract that covers routine use, a specific disclosure where a deliverable is substantially generated, and a record that lets the business answer the question when it is asked. A fixed £595 covers the drafting or review of the AI provisions for the agreement, delivered in five working days.

Who this is for

Agencies, consultancies, publishers, developers and any business in England and Wales whose deliverables or products contain generated content and whose customers may ask, or may find out.

What matters in generated content disclosure

The three reasons a disclosure may be required

Disclosure is required where the customer's contract or its supplier policy says so (increasingly common in procurement templates, and sometimes a prohibition rather than a disclosure obligation), where the law or a platform requires generated content to be labelled or disclosed in the context in question (advertising that could mislead, synthetic media on platforms with labelling rules, markets with disclosure laws), and where silence would be a misrepresentation: a deliverable described as the business's original creative work, a report presented as the consultant's analysis, a review presented as a customer's; the Digital Markets, Competition and Consumers Act 2024 treats misleading omissions as unfair practices for consumers, and the Misrepresentation Act 1967 and the common law apply between businesses.

Standing disclosure, specific disclosure and the difference

A standing disclosure in the contract (the business uses AI tools in producing its deliverables, outputs are reviewed by its staff, the categories of tool are these) covers routine assistance (drafting, editing, research, code completion) and means the customer has agreed in advance; a specific disclosure in or with the deliverable covers content that is substantially generated (an image, a video, a body of text the business did not write), content the customer's contract requires to be flagged, and content that will carry a label; the clause drafted for the business sets both, with the trigger for specific disclosure stated so that staff can apply it, and the business's AI use policy makes staff apply it.

The wording that discloses without alarming

The disclosure describes what was done rather than apologising for it: that the business uses AI tools in the stated ways, that every output is reviewed and the business stands behind the deliverable as its own work, that the customer may restrict the use of tools on its work by notice, and that specific deliverables will be identified as generated where the clause requires; the wording avoids both the undisclosed and the over-disclosed (a label on every email is noise that devalues the disclosures that matter), and it is consistent with what the business says in its marketing, because a disclosure that contradicts a 'hand-crafted' claim is the misrepresentation the clause was meant to prevent.

Labels, platforms and the markets with rules

Some platforms require generated or synthetically altered media to be labelled when uploaded, some jurisdictions require disclosure of synthetic content in particular contexts (political advertising, impersonation, certain consumer communications), the EU's AI regulation imposes transparency obligations on providers and deployers of certain systems that affect businesses selling into the European Union, and the advertising codes treat undisclosed alteration as potentially misleading where it affects a claim; the clause allocates responsibility between the business and the customer (the business identifies generated content, the customer applies the labels its platforms and markets require, or the business does so where it publishes), and provides for the allocation to change as the rules do.

The record behind the disclosure

The business keeps a record for each deliverable of the tools used, the prompts where they matter, the extent of generation and the review applied, so that it can make the specific disclosure accurately, answer a customer's question, substantiate a label and defend a claim; confidential information, trade secrets and clients' data must not be entered into tools whose terms permit the provider to use inputs for training or to retain them, which the Trade Secrets (Enforcement, etc.) Regulations 2018 and the business's own confidentiality obligations make a question of reasonable steps, and the record also shows which tool saw which customer's material, which a customer's data protection questionnaire will ask; the Copyright, Designs and Patents Act 1988 (section 9(3)) makes the person who made the arrangements the author of a computer-generated work, which is untested on modern tools, and protects only original works, so the record of the human contribution is also the record of what the business owns.

The disclosure that was not made and the claim that follows

A customer that paid for original work and received undisclosed generated content has a claim for misrepresentation or breach (a refund, damages, termination), a customer whose contract prohibited AI has a breach claim regardless of the quality of the work, and a customer whose generated content was challenged by a third party looks to the business under the warranty and indemnity; the clause limits the business's warranties and indemnity to what it has disclosed and checked, which only works if the disclosure was made, so the clause, the AI use policy and the record are drafted as one system, and the contract provisions that accompany the policy carry the clause into the business's customer, supplier and staff terms.

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 every customer we use AI?

A standing disclosure in the contract covers routine assistance and means the customer has agreed in advance. Specific disclosure is for substantially generated deliverables, contract requirements and labelled content. The clause sets both triggers.

What happens if we do not disclose and the customer finds out?

A claim for misrepresentation or breach, a breach claim regardless of quality where the contract prohibited AI, and no protection from the limited warranty and indemnity, which only work where the disclosure was made.

Should the disclosure go in the contract or on the deliverable?

Both: the standing disclosure in the contract, the specific disclosure in or with the deliverable where the trigger applies, and a record behind each so the business can answer the question when asked.

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 clauses in a client contract when you deliver AI-assisted work
• AI-generated images and copyright in client work

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.