It Looks Impressive—Until You Need It
I have tested ChatGPT for drafting contracts. Ask it for a certain type of contract and it produces something that looks incredible. But it is like a recipe judged by someone who does not cook—you will not know the problems until the dish is done. With a ChatGPT contract, you do not discover the missing pieces until a dispute forces you to actually rely on it.
A Contract Should Reflect Your Deal, Not Default Language
A contract should contain the terms the parties actually agreed to—not generic boilerplate a machine generated. When I draft a contract for a client, I spend initial time discussing what terms matter, then brainstorm worst-case scenarios: What if this relationship goes badly? We build provisions for dispute resolution, intellectual property ownership, and risk allocation specific to that deal. ChatGPT skips all of that.
The Hallucination Problem
The biggest issue I have encountered is that ChatGPT fabricates legal content. I have asked it to find cases supporting a legal argument—it returns case names, citations, and summaries that look authoritative. But when I check the actual cases, they say nothing about the issues discussed. The AI produces results rather than admitting it does not have reliable information, and that makes it dangerous for legal work.
Where AI Fits—and Where It Does Not
ChatGPT is useful as a brainstorming tool at the front end of contract drafting. But right now, the technology requires significant guidance, oversight, and quality control. You cannot rely on it to produce a high-quality legal document without a knowledgeable human reviewing every provision against the actual terms of your deal.
Video Transcript
Can You Draft a Contract With ChatGPT?
The short answer is yes, but then how good is that contract? That is really what we are getting at here.
The Problem With ChatGPT
I hopped onto ChatGPT, and I have tried drafting some contracts. First off, it is amazing how all you have to do is ask it to draft a certain type of contract, and it will, and it looks incredible. But it is kind of like me, who is I don’t know much about cooking. If I look at a recipe, I am not really going to know whether that recipe is going to taste great or terrible. But a lot of chefs and professional cooks could look at that and go, “Oh yeah, there is some problems with that recipe.” And you don’t really know until the recipe is done. Or at least I wouldn’t know. And then I taste it, and I go, “Oh wow, that is way too much salt or whatever.” And that is the problem with ChatGPT contracts right now. You don’t know until there is an issue that requires you to go look at the contract and you see certain pieces are missing or weren’t written the way you want.
What Should Be in a Contract?
It all goes back to what should be in a contract, to begin with. It should be the terms that the parties agree to. So to have some computer spit out generic or default language doesn’t mean that reflects the terms that you and another party want when entering into the agreement. It also doesn’t mean that all the important terms are included.
As an Attorney, How Do I Draft a Contract?
When I draft a contract for a client, I spend the initial time talking with them about what are the terms that are important. And then next, what are the problems that we might foresee? Like what are the hypotheticals where this relationship may not go well? We want to make sure then that those worst-case scenarios are somehow addressed, and problems are mitigated in the contract. That might be a framework for dispute resolution. It might be an agreement on how certain issues will be handled. It might deal with intellectual property rights and who owns them.
A Course on How to Use ChatGPT?
So I have thought about doing an online course for people on how to use ChatGPT to draft contracts, and I would be very interested to know if that is something that you would be interested in and want to attend and find valuable to you. A course on how to use ChatGPT to draft contracts would need to talk about what is the process to assess what terms should be in a contract, what are common mistakes in contracts, and then how do you design the prompts for ChatGPT to draft that type of contract for you. And then, of course, you have to look through that contract afterward to make sure ChatGPT did it right.
I think it is really cool how AI is going to improve in the future. Right now, it is an incredible tool to use at the front end to kind of brainstorm, but so far, I have been incredibly disappointed with ChatGPT’s ability to produce high-quality legal documents or legal research. In fact, the biggest problem I have had is ChatGPT just makes stuff up, it seems. Some people call those hallucinations.
For example, I might say, “Hey, ChatGPT, are there any cases that stand for the proposition that, and then I put some legal argument in there.” ChatGPT says, “Yes, there are, and here are the cases, and here is a summary of those cases.” I look at those cases, and it says nothing about the issues that we talked about. I get it. ChatGPT needs to produce some results. There must be something in its programming that says produce the best content you have available rather than air on the side of precision and accuracy. Whatever it is, I don’t understand the coding behind the AI software, but the computers are not yet at the point where we can rely on them for this without significant guidance, oversight, and quality control.
So if you are interested in a course online about how to draft contracts using ChatGPT, I would love to have your feedback. And if you could tell me the types of contracts that would be relevant to you, that would help me design the course in a way that would be useful to you.
Conclusion
All right, if you have any constructive feedback, please feel free to provide that. I am somewhat new to this, and I am working to provide value that is relevant to you as business owners and other listeners interested in entrepreneurial and business topics. It is my goal to demystify business law so that people have practical understanding and are empowered to run their business and avoid legal problems and hopefully experience a better business and a better life.
If you would like to learn more about me, you can go to aaronhall.com. If you would like the free videos that I send out only exclusively to subscribers, you can get them at aaronhall.com/free. And if you would like more content like this, you are welcome to subscribe to this YouTube channel, and you will be notified next time when we go live, which I expect will be quite soon here. Thanks for joining me today.