What an AI-drafted contract usually gets wrong under English law

Contracts produced with AI drafting tools are fluent, well organised and, for a business in England and Wales, wrong in a consistent set of ways, because the tools are trained largely on US material and reproduce its assumptions. The errors are predictable: US law transplanted whole, exclusion clauses that fail the statutory tests, sums on breach that are penalties, execution that does not create a deed, third-party rights left open, and provisions English law expects that are missing altogether. This page sets out what a review of such a contract corrects. 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, founders and managers in England and Wales who have drafted a contract with an AI tool, from a supply agreement or a consultancy contract to terms of business, and want to understand what is likely to be wrong with it before deciding whether to have it checked.

The errors the review corrects

US law transplanted into an English contract

The tools default to US concepts: 'merchantability', 'consequential damages' in the US sense, 'attorneys' fees', 'indemnify, defend and hold harmless', 'work made for hire', 'at-will' termination and a governing law from a US state. Each has an English equivalent or none: the implied terms are satisfactory quality and fitness under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, costs follow the court's discretion, copyright vests in the author under section 11 of the Copyright, Designs and Patents Act 1988, and employment needs notice under the Employment Rights Act 1996. The review replaces the concept, not just the word.

Exclusion clauses that do not survive the statutory tests

An AI draft excludes 'all warranties, express or implied' and 'all liability of any kind'. Against a business, exclusions in standard terms and exclusions of the implied terms are enforceable only if reasonable under sections 3 and 6 of the Unfair Contract Terms Act 1977, judged under section 11; against a consumer, the Consumer Rights Act 2015 makes the core rights unexcludable under section 31 for goods and section 57 for services, and tests other terms for fairness. Liability for death or personal injury caused by negligence cannot be excluded against anyone. The review drafts exclusions and a cap that will hold.

Penalties dressed as liquidated damages

Fixed sums on breach, default interest that steps up sharply, and 'liquidated damages' schedules are enforceable in England only where the sum protects a legitimate interest and is not out of all proportion to it; otherwise the clause is a penalty and unenforceable, whatever it is called. The review tests each sum against that rule, keeps the ones that reflect a genuine interest, and replaces the rest with provisions that recover actual loss.

Execution, deeds and formalities

AI drafts add 'signed, sealed and delivered' or 'in witness whereof' without creating a deed, and a deed matters where there is no consideration (a guarantee, a variation, a release) or a longer limitation period is wanted. A deed must be clear on its face and executed as section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 and, for a company, section 44 of the Companies Act 2006 require. Contracts for land must satisfy section 2 of the same 1989 Act, and a guarantee must be in writing and signed under the Statute of Frauds 1677. The review sets the execution clause to what the document needs.

Third-party rights and entire agreement

A 'no third party beneficiaries' clause is a US concept; in England the exclusion needed is of rights under section 1 of the Contracts (Rights of Third Parties) Act 1999, without which a third party the contract benefits may enforce it. An entire agreement clause does not exclude liability for misrepresentation unless it says so and the exclusion is reasonable under section 3 of the Misrepresentation Act 1967, and it never excludes fraud. The review drafts both provisions in their English form.

The provisions that are missing

The review adds what English practice expects and the tools omit: interest on late payment under the Late Payment of Commercial Debts (Interest) Act 1998 or a substantial contractual remedy in its place, data protection terms under the UK GDPR where personal data is processed, a supplier's position on the customer's insolvency under section 233B of the Insolvency Act 1986, VAT, the staff transfer rules where services change hands, and, for consumer contracts, the cancellation rights and pre-contract information the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 require.

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

Our AI contract looks professional. Is it likely to be wrong?

Probably in the ways this page describes, because the tools reproduce US assumptions. Whether the errors matter depends on the deal; the review tells you which do and corrects them.

Can we just change the governing law to England and Wales?

That fixes the governing law clause and nothing else. The concepts in the body of the contract remain US concepts that English law will read differently or not at all. The review replaces the concepts.

Does the review rewrite the contract?

It corrects and completes your document as tracked changes, with an explanation. Where the draft is structurally unsuitable for the deal, the review says so and quotes for drafting it properly.

Related guidance and services

• Review of an AI-drafted contract, £495, the service this page describes
• Contract review, £495
• American clauses in an AI-drafted contract for a UK business
• 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.