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Note: This article is just one of 60+ sections from our full report titled: The 2024 Legal AI Retrospective - Key Lessons from the Past Year. Please download the full report to check any citations.

Standardization of Contract Terms and Clauses

AI is facilitating the standardization of contract terms and clauses across industries, leading to more consistent and efficient contracting processes. By leveraging extensive databases of legal documents, AI tools enable users to adopt best practices in contract drafting, even if legal is not their primary expertise.[78] This standardization offers several advantages:

• Reduced negotiation times and disputes over ambiguous terms.[79]

• Improved regulatory compliance and risk management.

• More equitable agreements through the adoption of industry-standard clauses.

"Even though standardization is one of the greatest achievements of the modern global world, I remain skeptical about the feasibility of fully standardizing all contracts—though it is a goal to strive for. Even standard templates provided by platforms such as LexisNexis or Thomson Reuters are undoubtedly valuable, as they offer a more efficient starting point for drafting compared to beginning from scratch. However, in practice, lawyers and clients often amend and adapt key provisions—not just boilerplate terms—to meet their specific needs and requirements."

Kirill Ivaninskiy, Legal Counsel, UK