Reviewing business contract terms means looking beyond the price and signature line. Before hiring a consultant, subscribing to software, or purchasing services, ask what will be delivered, how your information will be handled, and what happens if expectations are not met.
Artificial intelligence adds another layer to that review. A useful starting question is whether either party will use AI to process business information or create deliverables. From there, examine how the agreement addresses permission, ownership, accuracy, and responsibility.
Why AI Clauses Deserve Attention in 2026
In a May 2026 analysis of business AI use, the U.S. Census Bureau reported that overall usage ranged from 17% to 20% during December 2025 through early May 2026. The survey asked about AI use in any business function, not just production.
For contract review, consider a hypothetical marketing agency that uses AI to draft client materials. The buyer should ask which information enters the tool, who checks the results, and whether the promised ownership rights match the work delivered. Those questions belong alongside familiar concerns about deadlines and payment.
Start With Deliverables, Deadlines, and Payments
Define What Counts as Completed Work
Ask the agreement to identify deliverables, formats, milestones, and responsibilities. Instead of relying on a broad description such as marketing support, specify the materials expected and the process for approving them.
Review how revisions, delays, and additional requests will be handled. Identify who can authorize extra work and whether approval must be documented before additional charges arise.
For ongoing services, ask who will approve changes to the software or underlying AI model. Consider whether testing, advance notice, or a documented replacement process is needed to keep the service useful for your business.
A Practical Question to Ask
If the work arrives on time but contains errors, what correction process, review period, and payment obligations apply? Discuss the answer before treating delivery as acceptance.
Check the Full Cost
Look for setup charges, usage limits, additional-user fees, minimum commitments, and renewal pricing. For an AI-enabled service, ask how usage is measured and whether spending alerts or limits are available.
Record invoice due dates, the procedure for disputing charges, and any cancellation costs. Do not assume a monthly payment schedule means you can end an annual commitment each month; ask the provider to explain the relationship between billing and duration.
Check AI Permissions and Data Confidentiality
Identify the information the vendor will receive, including customer records, financial documents, internal communications, and confidential plans. Ask whether the proposed confidentiality language covers prompts, uploaded files, and generated results.
The FTC’s guidance on AI privacy commitments warns that companies may face enforcement for failing to honor promises about customer information, including commitments concerning model training.
Request a clear explanation of permitted uses: providing the service, training shared models, improving products, or sharing information with other providers. Ask separately about storage periods, deletion, and access by subcontractors. A response about training permissions does not answer every retention or access question.
Compare the signed agreement with any online data policy and product-specific addendum. Ask the provider to resolve inconsistencies in writing, especially where consumer accounts, business accounts, and optional features have different terms.
Put Security Responsibilities in Writing
The FTC’s business security guide recommends addressing service-provider security in contracts and verifying compliance. Discuss access controls, security evidence, incident reporting, and responsibility for investigating problems. Request notification terms suited to the information involved rather than assuming a generic promise covers every situation.
Clarify Ownership of AI-Assisted Deliverables
Separate material you supply, resources the vendor already owns, and new work created for the project. Ask what rights transfer, when they transfer, and whether third-party licenses restrict your intended use.
For AI-assisted work, distinguish contractual ownership promises from copyright protection. In its January 2025 explanation of AI copyrightability, the U.S. Copyright Office concluded that protection depends on sufficient human-authored expression. Merely supplying prompts does not establish that requirement, although qualifying human contributions can receive protection.
Accordingly, do not treat an ownership sentence as a guarantee that every generated element carries exclusive copyright. Ask whether the provider will disclose material AI use, document human contributions, and identify licensed components.
For example, a commissioned campaign might combine original copy, licensed photography, and AI-generated illustrations. Request a rights summary for each component rather than one unexplained assurance covering everything.
Also confirm access to editable files and permission to adapt the work later. A finished image or report may not include the working files your next provider would need.
Read Liability Limits Alongside Indemnities
A liability limit addresses restrictions on potential recovery. An indemnity allocates responsibility for specified claims or losses. Read both together and ask how they interact, including whether a cap applies to indemnity obligations.
For a concrete example, Google Cloud’s service-specific terms provide certain generated-output infringement protections subject to conditions and exclusions. These include restrictions involving ignored safety tools and some trademark-related claims. That is one provider’s arrangement, not a universal protection for AI purchases.
Ask which claims are covered, who controls the defense, whether settlement needs approval, and what expenses are included. Discuss the treatment of confidentiality breaches and unauthorized data use with counsel rather than judging protection by a clause heading alone.
Review Renewals, Changes, and Exit Options
Record the initial term, renewal date, cancellation deadline, and required notice method. Request clarity about price increases, material service changes, and whether you can exit if a change undermines your intended use.
The FTC has warned about quietly changing data-use terms to repurpose previously collected consumer information. For your review, ask how changes will be communicated and which version of each incorporated policy applies.
Plan the handover too. Ask how you will export files, what transition assistance costs, when access ends, and how deletion will be handled, including backups and legally required retention. These are separate questions from whether cancellation itself is permitted.
Understand How Disagreements Will Be Handled
Review the chosen governing law, dispute location, and any required negotiation, mediation, or arbitration process. Ask counsel to explain restrictions on available remedies and responsibility for legal costs. For a small business, the practical expense of pursuing a dispute deserves attention alongside the maximum amount potentially recoverable.
Review Business Contract Terms Before Signing
Gather the agreement, order form, schedules, and linked policies. Ask which document controls if provisions conflict. List unresolved questions about scope, price, AI use, ownership, responsibility, and exit terms, then discuss material concerns with a licensed attorney before signing.
For more educational reading, explore RandG Law’s legal articles. Understanding business contract terms begins with identifying what the written agreement actually says, not what either party assumes.
Educational information only: This article provides general U.S.-focused information, not legal advice. RandG Law is not a law firm. Contract rules vary by jurisdiction and transaction; consult a licensed attorney about your circumstances.