Prompts and Large Language Models: A New Tool for Drafting, Reviewing and Interpreting Contracts?

Abstract

The rise of Large Language Models (LLMs) in the field of generative AI and the practice of designing inputs (prompts) to drive optimal outputs for these models are transforming legal practice. This article examines the legal status of these prompts that are used to generate contractual clauses and the potential of prompts to be used for interpreting ambiguous contractual terms. In doing so, it presents a novel analysis of the interaction of prompts with the parol evidence rule. The article begins with an introduction to the promise offered by LLMs in the field of contract drafting before venturing into a non-technical explanation of LLMs. It then explores the current use of LLMs in the automation of the contract drafting process and challenges in deploying LLMs in legal practice. The article then proceeds to explore four scenarios of potential uses of LLMs in contract drafting and how these might impact the legal status of prompts and their interaction with the parol evidence rule. Finally, the article sets out suggested practice approaches for incorporating prompts into the contracting process for clarity and enforceability before presenting a conclusion on the state of the evolving landscape of AI-powered legal practice and the drafting of contracts.