Get It In Writing

Can I Use ChatGPT to Write a Business Contract? A Lawyer’s Honest Take

Short answer: you can use ChatGPT to write a business contract, the same way you can pull your own tooth. It’ll produce something. Whether that something protects you when a deal goes sideways is a completely different question — and as a business attorney, that’s the question I get paid to answer after the fact, usually when it’s more expensive to fix than it would have been to do right.

Let me tell you what I actually see, because the honest take isn’t “AI bad, lawyers good.” It’s more useful than that.

What an AI-drafted contract usually looks like

I had a client admit he’d used Gemini to create the commercial and residential leases he sent me. What came back looked like a mishmash of ideas about various situations, organized in a way that made no real sense. It read more like an outline and a sales pitch than a contract. It took me over an hour just to work through one of the shorter documents, another hour to talk it through with him, and it will take many more to turn those ideas into something actually enforceable.

This is the pattern. AI-generated contracts tend to be:

  • Confident and comprehensive-looking — lots of headings, defined terms, official-sounding language.
  • Internally inconsistent — clauses that contradict each other, or that were clearly written for a different kind of deal.
  • Missing the things that matter for your situation — because the AI doesn’t know your situation.

Here’s the deeper problem. Just like people, AI seems to think it can throw words on a page and make legal obligations appear or disappear. It can’t. There are laws, and you can’t always write something into a document to make them go away — even if both sides agree to it. A contract isn’t magic words; it’s an instrument that has to operate inside real law. AI doesn’t know which of its confident sentences the law will simply ignore.

The three failure modes I see most

1. It’s a template pretending to be a deal. One of the most common misconceptions I run into is that legal documents are just forms to be filled out. AI leans right into that. It gives you a form. But a real contract is decision-making reduced to writing — who bears which risk, what happens on default, what the remedies are. A form skips the decisions, which means you haven’t actually made them.

2. It doesn’t reflect the verbal deal. The most expensive words in business are “we both know what we meant.” I see contracts that don’t match what the parties actually agreed to all the time. If the promise isn’t in the document, it isn’t enforceable — there’s a whole rule about that. AI writes what’s statistically common, not what you and the other side shook hands on.

3. It’s built for a different transaction. I’ve seen an NDA generated for one kind of deal dropped into a completely different one — so it didn’t cover who owned the work product, which was the entire point. The document looked fine. It just protected the wrong thing. (When you actually need an NDA — and why the free template won’t protect you.)

So when is it fine to use AI?

I’m not going to pretend the tool is useless. It’s genuinely helpful for:

  • Understanding — asking what a clause generally means, so you walk into a conversation informed.
  • First-draft scaffolding for something low-stakes that a human will then rework.
  • Spotting questions to ask — “what should I be worried about in a lease like this?” is a fine prompt.

Where I’d stop you cold is using AI output as your actual, signed, relied-upon contract for anything that matters — a business sale, a partner buy-out, a commercial lease, a loan, an independent-contractor relationship. If it’s the document you’d bring to court, a human who knows the law and your deal needs to have built it. (And before you paste a real agreement into a chatbot to “check” it, read this first: is it safe to upload a contract to ChatGPT? — there’s a privacy trap most people miss.)

The honest bottom line

Using ChatGPT to write your business contract isn’t reckless because AI is bad. It’s risky because a contract’s whole job is to protect you in the specific situation you’re in — and the specific situation is exactly the thing a general-purpose model doesn’t have. The cost of that gap doesn’t show up on the day you sign. It shows up on the day something goes wrong, when you reach for a remedy and find out the document never gave you one.

If it isn’t in writing, it doesn’t exist. And if it’s in writing but wrong, that can be worse — because now everyone thinks they’re covered.

Want a fast way to find the gaps before they cost you? Grab the free Get-It-In-Writing Business Audit — 15 things that should be in writing in your business, but usually aren’t. [Get the checklist →]

This article is general education, not legal advice, and does not create an attorney-client relationship. Laws vary by state and situation — for your circumstances, talk to a licensed attorney.