American clauses in an AI-drafted contract for a UK business

AI drafting tools write in American legal English because that is most of what they were trained on, and the result is a contract full of clauses that a lawyer in England and Wales recognises as foreign: some harmless, some meaningless here, and some that do the opposite of what the business intends. This page takes the commonest of them in turn and says what English law makes of each. I review one AI-drafted contract for a fixed fee of £495 in three working days, returned as tracked changes with a clean copy and a written explanation of the changes.

Who this is for

Business owners and managers in England and Wales who have drafted a contract with an AI tool and want to understand the American clauses in it before deciding whether to have the document checked, whether the contract is with a UK counterparty or a US one.

The American clauses and what English law makes of them

Indemnify, defend and hold harmless

The US triplet is treated in England as an indemnity, which is a promise to pay for a defined loss, with 'defend' adding an obligation to conduct the defence of a claim and 'hold harmless' adding nothing the courts have settled. An indemnity in an AI draft is usually unlimited, mutual in words but not in effect, and wide enough to cover the indemnified party's own negligence. The review confines it to third-party claims arising from the indemnifying party's breach or negligence, brings it within the liability cap where that is intended, and states how claims are conducted.

Attorneys' fees, costs and interest

A clause awarding the prevailing party its 'reasonable attorneys' fees' does little in England, where costs are in the court's discretion and recovered on the standard basis unless the contract provides for indemnity costs, and even then within the court's control. Interest 'at the maximum rate permitted by law' has no reference point here. The review provides for costs and interest in English terms, including the statutory interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998 where the contract is for goods or services.

Merchantability, as-is and the disclaimer in capitals

The implied warranty of merchantability is a US concept; in England the implied terms are description, satisfactory quality and fitness for purpose under sections 13 and 14 of the Sale of Goods Act 1979, and reasonable care and skill for services under section 13 of the Supply of Goods and Services Act 1982. They can be excluded against a business only where reasonable under the Unfair Contract Terms Act 1977 and not at all against a consumer under the Consumer Rights Act 2015, and capitals make no difference. The review replaces the disclaimer with a warranty and exclusions that survive the tests.

Consequential damages, punitive damages and the cap

'Consequential damages' in a US draft means most indirect loss; in England the phrase has a narrow, technical meaning, and an exclusion of 'consequential loss' does not exclude loss of profit that flows directly from the breach. Punitive damages are not awarded for breach of contract here, so excluding them is harmless and pointless. The review drafts an exclusion that lists the losses meant to be excluded and a cap tested for reasonableness under section 11 of the Unfair Contract Terms Act 1977.

Work made for hire, at-will employment and independent contractors

'Work made for hire' does not transfer copyright in England; the author owns it under section 11 of the Copyright, Designs and Patents Act 1988 unless assigned in writing under section 90, so the clause is replaced by an assignment. 'At-will' employment does not exist; an employee is entitled to notice under section 86 of the Employment Rights Act 1996 and to protection from unfair dismissal. An 'independent contractor' clause does not settle status, which turns on the facts and, for contractors working through companies, on the off-payroll rules in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003.

Arbitration, choice of law and jurisdiction

An AI draft sends disputes to arbitration under AAA or JAMS rules in a US city, applies the law of a US state, and waives jury trial. The review replaces them with English law and the jurisdiction of the courts of England and Wales or, where arbitration is wanted, an arbitration clause seated in England under the Arbitration Act 1996, and removes the jury waiver, which has no application here. Where the counterparty is in the US, the review advises on which forum the business can enforce in.

What it costs

Review of an AI-drafted contract, £495. One contract, returned as a marked-up Word document with my amendments as tracked changes, a clean version with the changes accepted, and a written explanation of the changes. Three working days from payment.

Buying online forms the engagement on payment. The scope is what the review of an ai-drafted contract page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own Word document returned with every amendment I consider necessary shown as a tracked change, so you can see exactly what I changed and accept or reject each one
• A clean version with every change accepted, ready to send
• Corrections to anything that is wrong as a matter of English law, unenforceable as drafted, or internally inconsistent
• Missing provisions added where the document has left a gap that matters: usually liability, termination, payment, intellectual property or data
• Comments in the margin where a clause is a commercial choice rather than a legal one, so the decision stays yours
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, with anything you should think about before sending it out
• Follow-up questions on the mark-up answered by email, included

What is not included

• A full rewrite. This is a review and amendment of your document, not a replacement for it. If the draft is structurally unsuitable for the deal, I will say so and quote separately for drafting it properly
• A second round of amendments after you have changed the document again, which I can quote for
• Negotiating with the other side
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Reviewing a document the other side drafted, which is the contract review service, at the same price

Questions I am often asked

The other side is a US company. Should we keep the American clauses?

Keep English law and jurisdiction if you can, and draft the substantive clauses in English terms so that the contract means what you think it means in the forum you have chosen. The review does that and says where a US counterparty will push back.

Is 'hold harmless' dangerous or just redundant?

The indemnity it sits in is the danger: usually unlimited and wide enough to cover the other party's own fault. The review confines the indemnity; the words themselves add little.

Does an exclusion of consequential damages protect us from a loss of profit claim?

Not reliably. In England, loss of profit flowing directly from the breach is direct loss and is not excluded by that wording. The review lists the losses you want excluded and caps the rest.

Related guidance and services

• Review of an AI-drafted contract, £495, the service this page describes
• Contract review, £495
• What an AI-drafted contract usually gets wrong under English law
• The clauses an AI leaves out of a UK contract

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