"The vendor claims co-ownership of your content. The agreement gave the vendor joint ownership of every piece of content the AI tool generated using the organization's data. The vendor could use that content for any purpose, including marketing to competitors, without consent."
"The agreement granted the vendor a perpetual, irrevocable license to the organization's data once it was incorporated into something the vendor called 'Aggregated Statistics.' The definition of that term was broad. There was no defined standard for how the data would be anonymized."
"There was no mechanism to claw that data back after the contract ended. Once the data went in, it would be gone."
In-house lawyers frequently receive contract review requests for AI tools, often promising efficiency and time savings. However, these contracts can contain hidden costs, particularly regarding data control. A recent review of an AI content platform contract revealed four major issues. The vendor claimed co-ownership of generated content, allowing them to use it without consent. Additionally, the vendor obtained a perpetual license to the organization's data, with vague terms on anonymization and no recovery options post-contract. These concerns highlight the need for thorough contract scrutiny beyond standard checklists.
Read at Above the Law
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