Increasing LLM Context Improves Generic AI contract analysis

A while ago I mused on the future of CLM systems in the age of AI. Yesterday OpenAI released an API to an LLM (think ‘chat-bot’) with an input limit of about 20 pages (vastly more than the 4 or so in previous versions), basically more contacts can be processes by the AI in one go. This should provide much better quality output than using summarisations of the contract, or trying to feed the AI only the ‘relevant’ parts of the contract in an attempt to distil the contract into a smaller input limit. For fun I knocked together a quick app and tried it out. It does indeed provide better answers, and with a bit of thought, can easily be used to extract contract data, or identify where the contract does not comply with a playbook. As this is generic technology, it re-enforces my view that CLM System providers have to do a lot more that wrap a UI around generic AI tools. FYI here’s a sample output:

Enter query or END to finish:

1. The purpose of the contact. 2. The contract parties and their roles. 3. The contract juristriction 4. The key dates and time periods in the contract. 5. The conditions for termination 6. The maximum liabilities for each party. 7. The non-disclosure obligations for each party 8. The anti-slavery provisions in the contract. In giving your answer, please include clause references.

RESPONSE

1. The purpose of the contract: The purpose of the contract is for the Contractor to provide manufacturing services to the Customer according to Customer’s specifications (Section 3).

2. The contract parties and their roles:

- Customer: INVASIX LTD., who designs, manufactures, and sells the Products (Section 2)

- Contractor: FLEXTRONICS ISRAEL LTD., who is in the business of Turn-Key projects and will provide manufacturing services to the Customer (Section 2)

3. The contract jurisdiction: The contract is governed by the law of the State of Israel, and the parties consent to the jurisdiction of the courts of the City of Haifa (Section 22.4).

4. The key dates and time periods in the contract:

- Effective Date: 1.4.2011 (Section 1)

- Initial Term: The contract will continue for an initial term of one year from the Effective Date (Section 2)

- Renewable Term: The contract will automatically be renewed for successive one-year increments, unless either party requests in writing at least ninety (90) days prior to the anniversary date that the contract not be renewed (Section 2)

5. The conditions for termination:

- Termination for cause: If either party fails to meet the terms and conditions of the agreement, the non-defaulting party can terminate the agreement after providing written notice and allowing the defaulting party thirty (30) days to cure the default (Section 15.1).

- Termination without cause: Either party can terminate the agreement at any time without cause by providing four (4) months written notice (Section 15.2).

- Immediate termination: Either party can immediately terminate the agreement if the other party becomes insolvent, files for bankruptcy, enters into receivership, or dissolves its assets (Section 15.3).

6. The maximum liabilities for each party:

- Customer’s liability: Customer’s liability for any direct or indirect costs related to the Products, including components, work in progress, and raw materials, is limited to the amounts specified in Section 8 concerning finished Products and Section 6 concerning components, work in progress, and raw materials (Section 8.1).

- Contractor’s liability: Contractor’s liability is limited to the amount it actually received in consideration for the manufacturing services under the respective claim or demand by the Customer or any third party, under any law, rule, or regulation (Section 18.2).

7. The non-disclosure obligations for each party: Both parties are obligated to keep confidential all proprietary and technical information revealed or become known to them during the course of the agreement and to not disclose or use such information except for the performance of the agreement or in connection therewith (Section 19).

8. The anti-slavery provisions in the contract: The contract does not contain specific provisions addressing anti-slavery measures. UNKNOWN.