Negotiating Key Terms in AI Vendor Contracts and Conducting Due Diligence to Assess AI Providers, Mitigate Risks

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, September 26, 2023

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE webinar will discuss the myriad of issues and challenges that arise when negotiating and drafting contracts with AI vendors. The panel will examine how to conduct due diligence to assess AI providers and will provide strategies for negotiating and drafting key contractual provisions to mitigate the risks associated with AI deployments.


AI solutions are becoming increasingly prevalent, and the technology is evolving at such a rapid pace that it is difficult to keep up let alone identify and evaluate the risks associated with AI deployments. Thus, it is critical for counsel and business leaders to understand AI to evaluate AI partnerships and effectively contract with AI providers.

Some key issues when negotiating and drafting AI vendor agreements include intellectual property ownership and infringement, data privacy, indemnification, liability caps, jurisdiction, and rights of the parties upon termination of the contract. Counsel must conduct extensive due diligence regarding these issues to ensure the successful adoption of the contract and to mitigate risks.

As AI continues to evolve so do the laws and regulations governing its use. Data privacy and security laws have a big impact on how AI can be used, and these laws are constantly changing. Under this ever-changing legal and regulatory landscape, it is imperative that counsel regularly review AI vendor agreements to ensure they are compliant with current data privacy laws.

Because many AI providers are startup companies with very little business history, business leaders and counsel must ensure an AI vendor can adequately meet the business needs of the client while also maintaining proper compliance with applicable rules and regulations. Before entering into an agreement, an assessment should be made as to whether the vendor is NIST compliant and has proper data security, cybersecurity insurance, and data privacy policies in place.

Listen as our authoritative panel of experts discusses how to conduct due diligence to assess AI providers and identify, evaluate, and mitigate risks with an AI deployment. The panel will also provide tips on negotiating and drafting key contractual terms in an AI vendor agreement.



  1. Understanding AI tools and how they are currently being used
  2. Data privacy and cybersecurity laws governing the use of AI
    1. California Consumer Protection Act and California Privacy Rights Act
    2. EU's General Data Protection Regulation
    3. Other state privacy and cybersecurity laws
  3. Factors to consider when assessing an AI provider
    1. NIST compliant
    2. Vendor security assessment questionnaire
    3. Privacy policies in place
    4. Insurance policies in place
    5. Business documents
    6. Client reviews
  4. Key contractual provisions in an AI vendor agreement
    1. IP ownership, infringement
    2. Representations and warranties
    3. Indemnification for data security breaches
    4. Data ownership
    5. Liability caps
    6. Insurance requirements
    7. Damages
    8. Jurisdiction for disputes that arise
  5. Key takeaways and practical considerations


The panel will address these and other key issues:

  • What are some of the advanced applications now using AI?
  • What are the key things to look for when assessing an AI vendor's ability to accomplish the client's business objectives?
  • What are effective strategies for negotiating specific contract provisions?
  • What are the key contractual provisions necessary to protect a client deploying AI tools?


Seigel, Randi
Randi Seigel

Manatt, Phelps & Phillips

Ms. Seigel provides legal and strategic counsel to healthcare providers, emerging health tech and services companies,...  |  Read More

Tanoury, Jordan
Jordan E. Tanoury

Reed Smith

Ms. Tanoury’s practice focuses on technology transactions, including complex technology-related master service...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video