There has been a great deal of discussion in the legal community lately about artificial intelligence, like ChatGPT, and how it could disrupt the legal profession, with some even predicting the obsolescence of lawyers entirely. With all of this discussion, I decided to use ChatGPT, an open source AI client, to generate a basic construction contract.
I gave the AI this prompt: "Write a construction contract for a single family home." I gave it no further instruction or parameters. Here's what it gave me:
This agreement is made and entered into on [Date] by and between [Name of Contractor], hereafter known as the "Contractor", and [Name of Owner], hereafter known as the "Owner", for the construction of a single family home located at [Address of Property], hereafter known as the "Property".
- SCOPE OF WORK The Contractor shall construct a single family home in accordance with the plans and specifications agreed upon by the Owner and the Contractor. The Contractor shall provide all necessary materials, labor, and equipment to complete the construction in a workmanlike manner and in accordance with all applicable laws and regulations.
- CONTRACT PRICE The total contract price for the construction of the single family home shall be [Dollar Amount]. This includes all materials, labor, and equipment necessary to complete the project in accordance with the plans and specifications agreed upon by the Owner and the Contractor. Any changes to the plans and specifications after the signing of this agreement shall be subject to additional charges.
- PAYMENT SCHEDULE The Owner shall make payments to the Contractor in accordance with the following schedule:
- [Percentage] of the contract price upon signing of this agreement
- [Percentage] of the contract price upon completion of foundation work
- [Percentage] of the contract price upon completion of framing work
- [Percentage] of the contract price upon completion of rough-in work
- [Percentage] of the contract price upon completion of insulation, drywall, and exterior finishes
- [Percentage] of the contract price upon completion of all work and final inspection
- TIME OF COMPLETION The Contractor shall complete the construction of the single family home in a timely manner and in accordance with the plans and specifications agreed upon by the Owner and the Contractor. The Contractor shall provide the Owner with a projected completion date at the signing of this agreement and shall notify the Owner of any changes to the projected completion date.
- CHANGES TO THE PLANS AND SPECIFICATIONS Any changes to the plans and specifications after the signing of this agreement shall be subject to additional charges. The Owner shall be responsible for any additional costs resulting from changes to the plans and specifications.
- WARRANTY The Contractor warrants that all work performed under this agreement shall be free from defects in materials and workmanship for a period of [Number] years from the date of completion. The Contractor shall repair or replace any defective work at no cost to the Owner during the warranty period.
- PERMITS AND INSPECTIONS The Contractor shall obtain all necessary permits and inspections required by the local building department. The Owner shall be responsible for any fees associated with permits and inspections.
- DISPUTE RESOLUTION Any disputes arising from this agreement shall be resolved through arbitration in accordance with the rules of the American Arbitration Association. The decision of the arbitrator shall be final and binding on both parties.
- ENTIRE AGREEMENT This agreement constitutes the entire agreement between the Owner and the Contractor and supersedes all prior negotiations, understandings, and agreements between the parties. This agreement may not be modified except in writing signed by both parties.
- GOVERNING LAW This agreement shall be governed by and construed in accordance with the laws of the state in which the Property is located.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date first above written.
[Name of Contractor] By: ______________________________ Title: ______________________________
[Name of Owner] By: ______________________________ Title: ______________________________
This contract is extremely basic, but it isn't terrible. At the least, it's much better than what I expected the AI to give me. It included things like an arbitration provision, governing law, and even a phased payment schedule. All in all, not terrible at all. This could be the shell for a decent contract, but that's really all it gave me--a shell to work from. If you plug more information and parameters into your instructions, you can get a more detailed document. This makes sense--there are numerous construction contracts readily available online for AI to base its draft on.
Curious, I wanted to see if AI could get some legal questions right. I asked it this: "Does North Carolina follow the doctrine of comparative negligence?" The answer, for all you non-North Carolina attorneys out there, is a simple "no." North Carolina is one of the last pure comparative negligence jurisdictions. This is what the AI gave me:
Yes, North Carolina follows the doctrine of comparative negligence. Under this doctrine, each party involved in a personal injury case can be assigned a percentage of fault based on their actions leading up to the incident. The injured party can then recover damages based on their percentage of fault, provided that they are found to be 50% or less at fault. If the injured party is found to be more than 50% at fault, they may be barred from recovering any damages. This is known as "modified comparative negligence," which is the legal principle used in North Carolina.
This is a great summary of modified comparative negligence, and is also a completely incorrect answer to my question. AI was good at generating a form contract, but it was bad at answering a legal question.
Safe to say, AI has limitations. This technology is in its relative infancy, but it will only keep improving. For now, lawyers should watch as AI develops, as it has the potential to become a very useful tool. It is not a question of AI replacing attorneys, rather attorneys who use AI effectively will be poised to replace those who do not. As the saying goes, watch this space. AI is going to be an indispensable part of the legal profession before you know it.