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Reviving Contracts with AI
Although contracting is an extremely common activity, companies that do it effectively and efficiently are rare. An estimate states that enterprises lose 5-40 percent of the overall value of the deal in a contract, owing to inefficiencies. With the rise of artificial intelligence (AI) companies are able to overcome some of the most haunting challenges of contracting.
One of the main challenges faced by organizations is the magnitude of contracts that are to be accounted for which are inconsistent in format, quantity, and are difficult to organize, handle and keep up-to-date. This challenge is a lot more difficult when the firm lacks the database of their contracts, hence costing large amount of manual work to draft, execute and better the contracts and the contract development process.
The modern technology can help. Cutting edge AI tools can extract data easily and elucidate the details and content present in the contract. The process of reviewing contracts, organizing and locating them happens a lot faster with the use of AI, with a steep reduction in the contract disputes, and increase in the magnitude of contracts that can be negotiated and executed.
The use of AI has certain significant advantages. For instance, the improved tools that are available for managing contracts raise the benchmark for the way legal documents are processed. AI-based contracting software can recognize the type of contract in multiple languages based on the pattern in which it is drafted. Also, the use of AI ensures that the contracts are consistent. Especially if a company is required to define a certain important detail in a pre-defined manner in NDAs, there is a need to ensure the consistency of the same, and also to inform all the board members are aware of the definition to be used.
In addition, AI-based contracting software can better assess risks present in contracts compared to people. Besides the risk of having a human error while drafting and reviewing a contract can be removed significantly.