How to use AI to review a legal contract for free

By Thomas Sorheim •  Updated: 12/21/22 •  5 min read

Warning: This is NOT legal advice. It is just an experiment with a 3rd party tool that may or may not be beneficial. This article is for entertainment purposes only. 

Imagine you are a smaller consulting company that provides some sort of services to a larger corporation. 

Before you start working with them, you must enter into a contract with Big Corp. 

They send you their contract for signature. 

Ask yourself this: What are the chances the contract is skewed in their favor? 

I would bet it is pretty big! 

So what do you do? 

Hire a lawyer to go over the contract before you sign?

Or do you read the contract yourself, hoping that you will catch the “traps” that are unfavorable to you? 

I am sure both scenarios happen all the time. 

But wait! 

Now there is a third option! 

Cue ChatGPT – the most advanced prompt-based AI available in 2023. 

Let me show you how anyone can use the ChatGPT AI to check any legal contract before entering into negotiations or signing.

(Heck, you can even ask it to draft a contract for you – any contract – if you do not have one)

How to use ChatGPT to find issues with your legal contract

This idea was shared with me by a friend who has already used this exact process in her own business. 

But her contracts are confidential, so I could not simply show you her contract or process. 

So I decided to replicate it, and show you how you can do the same for your business.

I started by Googling “master service agreement contract example”. 

This gave me plenty of options, and I simply picked a random example contract on page 1. 

I went with this one: 

Warning: This contract was a random contract I found by Googling. I have no legal qualifications to say anything about this contract, and this experiment has nothing to do with the company in this example contract. It is just a contract I found online that I use to illustrate by example how an AI tool can be used to review and point out issues of a contract.  

If the link does not work, please let me know by emailing, and I will use a second source document.

Once I had a real contract to play around with, these are the steps I took:

Step 1
Log in to ChatGPT. If you do not have an account, go to and sign up. It’s free.

Step 2
Write the following prompt: “Here is a contract from a client. Suggest issues to bring up to make it more fair for my company or any other issues to bring up for changes.” 

Step 3
Copy and paste all the text from the contract below the prompt – but in the same window. Use “Shift + enter” to get a new line or space between your prompt and the contract. 

Step 4
Press enter. 

Step 5
Wait a few seconds, and the AI will tell you what potential issues you should be mindful of in your contract. 

In this specific case, the AI gave me a list of six issues I should consider bringing up to make the contract fair to my imaginary company. 

Pretty cool stuff, right?

I would say this is a game changer for small business owners, as well as anyone who needs to deal with contracts one way or another. 

When businesses can arm themselves with AI, they gain power and leverage. 

I would claim that AI can create a leveled playing field where it is harder for the weaker part to get taken advantage of by the bigger party. 

But also, the legal industry is famous for charging you handsomely.  

Also, for many, there is a lot of anxiety associated with dealing with a lawyer or a law firm. Now we can all interact with a lawyer armed with a new level of understanding and knowledge of a particular contract beforehand. 

This is powerful stuff!

AI basically lowers the bar (no pun intended) and can help businesses and regular people, as well as lower their expenses with said lawyer. 

When ChatGPT was released at the end of November 2022, the legal industry quickly realized how severely this could affect or even disrupt their extremely profitable businesses. 

It is as if the AI opened pandora’s box, and now the lawyers are scrambling…

I found this panicking lawyer on Twitter:

You can read the full Tweet and thread here: 

Final thoughts

I hope this little experiment reveals some of the power that lies in the use of AI.

AI is here to stay, and it will become a part of your everyday life, whether you like it or not. 

To what extent and how fast, I cannot say. 

However, what I am sharing with you on this site, is happening right now! 

Not tomorrow! 

Not in the future! 

It is happening RIGHT NOW!

NB! This is important!
Do not take the output from an AI blindly as facts. It may or may not be factually correct, but you should never rely 100% on it. Use it as a guide. AI’s are and can be biased in some cases. Bias is one of the biggest challenges AI companies currently face.

Thomas Sorheim

I am the creator of the Practical AI newsletter and The Future Handbook website. I write about all things AI and try hard to make it all understandable for non-technical people.