In today's world, businesses share vast amounts of information and data, making confidentiality or non-disclosure agreements (NDAs) vital tools for safeguarding confidential information.
Many businesses with limited time or budget, who need to share information, may consider using ChatGPT, the innovative AI tool, as a quick fix for their NDAs.
Can you rely on ChatGPT to draft your non-disclosure agreements? Our Commercial Solicitors address this question in our article below.
Contents:
Why are NDAs critical legal documents?
NDAs are agreements which are crucial for businesses seeking to safeguard their confidential information, including sensitive information, know-how, proprietary information, trade secrets and data.
NDAs establish clear parameters for the use of that information and provide legal remedies if it is misused.
They should be used in a number of contexts including when sharing information with potential business partners or new freelancers.
How could ChatGPT help you with an NDA?
ChatGPT can be used to:
- Understand the background and issues around protecting your confidential information.
- Generate scenarios about how NDAs can safeguard your business.
- Research what an NDA looks like and what types of clauses it should include.
- Formulate ideas and questions to ask your lawyer when discussing an NDA.
What are the risks of using ChatGPT for legal contracts?
Whilst ChatGPT can help formulate ideas for your NDA, using AI to draft an NDA comes with some risks. It may miss nuances in relation to drafting an NDA, including:
- What is classified as confidential information?
- Should data protection clauses be included because the parties will share personal data caught by the UK GDPR?
- Should the NDA include clauses to allocate risk, such as an indemnity clause (a type of clause that is frequently challenged in negotiations).
In addition, using ChatGPT to draft an NDA can introduce other risks, for example:
- The NDA could be unenforceable if challenged by the other party.
- ChatGPT output may be misleading, inaccurate, or outdated and may not reflect the latest legal developments including the lessons learned from case law.
- A ChatGPT NDA may not adequately address your concerns or comply with applicable laws (e.g. it may not be UK GDPR compliant if data processing provisions are required but ChatGPT misses that requirement).
- The resulting output could be unclear and therefore create misunderstandings between parties, leading to dispute.
- Use of ChatGPT could lead to you disclosing highly sensitive or confidential information which it might misuse!
How can a solicitor help you with your NDA?
Our Commercial solicitors help to provide tailored NDA advice on:
- Which format of NDA is appropriate, for example whether it should be one-sided or mutual.
- Defining 'confidential information' to avoid ambiguity and disputes.
- Drafting data protection provisions in relation to the processing of shared data.
- Advising on which laws should govern the NDA (and the applicable jurisdiction).
- Negotiating the NDA.
- Practical measures to safeguard confidential information.
Our experienced and specialist NDA lawyers also consider how to ‘future-proof’ your NDAs to reflect your business’ anticipated evolution and growth.
Summary
Confidential information can be critical, and its loss or misuse can be hugely detrimental to a business. NDAs are the unseen armour that protects your most prized assets. ChatGPT can serve as a useful tool for ‘initial groundwork’, helping you understand what an NDA is and to brainstorm possible clauses and questions for your lawyer.
If you need legal guidance or support with drafting robust NDAs tailored to your business, our knowledgeable commercial law team is here to help. You should be cautious of using ChatGPT for critical legal documents and should not use it as a substitute for proper legal advice.
We address a similar question some clients ask us, I need legal terms of business – Can ChatGPT help me?
