What is an AI contract generator?

Contract drafting has long been one of legal’s biggest time drains — repetitive, manual, and difficult to scale. AI contract generators are changing that by using large language models to draft contracts, clauses, and terms in seconds, without sacrificing control.

In this guide, we explain how AI contract generators work, where they deliver the most value, and whether they’re a smart fit for your business.

What is an AI contract generator?

An AI contract generator describes the use of AI to automate the contract creation process. Full contracts, terms, or clauses are generated by the technology, enabling businesses to generate contracts in seconds using a simple prompt.

How does an AI contract generator work?

AI contract generators use large language models (LLMs) to predict what a contract should look like and include. In other words, their algorithms are trained using a large number of contracts. This exposure and training enable the AI to recognize common patterns, language, and even variables within contracts. 

This advanced understanding of contract structures and terminology makes it possible for AI contract generators to predict what a contract should include and how it should be drafted. 

The AI then leverages this understanding, and the information provided in a prompt, to generate intelligent contract drafts. 

How can AI contract generators help businesses?

1. Speeds up the contract drafting process

The biggest and most obvious benefit of using AI contract generation is that it speeds up the contract drafting process significantly. Manual contract drafting can be a lengthy and arduous process, especially if your business doesn’t have robust contract templates in place. 

An AI contract generator can streamline and automate this process, eliminating the need for lawyers to draft simple, routine contracts from scratch. 

2. Ensures consistency when drafting routine contracts 

Since AI contract generators have been trained to recognize and replicate patterns within contracts, they’re often effective in delivering consistent contract drafts. This is particularly useful when it comes to automating standardized contracts with default terms and relatively low contractual risk.  

Some AI contract management systems, like Juro, will even allow you to set specific conditions and guardrails when generating contracts. This enables you to implement your contract playbook and maintain control over the output. 

3. Empowers commercial teams to self-serve on contract creation

Contract-related tasks have traditionally been reserved for in-house legal teams. Yet, research shows that 69 per cent of in-house lawyers feel buried in low-value work. This means that the turnaround time for commercial contracts can be slower than many businesses would like. 

AI contract generators empower commercial teams to self-serve on these contracts with confidence, rather than relying on their already stretched legal teams for contract drafting. This has lots of benefits, from fewer blockers to faster contract workflows. 

Are AI-generated contracts reliable?

Lawyers are understandably wary about using AI for legal documents. They’re often business-critical and sensitive documents - and AI can make mistakes. 

But that doesn’t mean you can’t rely on AI tools to generate contracts, or that it isn’t beneficial to do so. 

It simply means that you should continue to review contracts created by AI, just like you would if they were drafted by someone outside of the legal department. 

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With the right level of oversight and the right prompts, AI-generated contracts can actually be extremely reliable. They can also provide a repeatable process for contract creation, making the entire contract drafting process more reliable. 

Like all  legal AI tools, AI contract generators will only be effective if you implement and use them properly.

Generate contracts in seconds with Juro's AI Legal Assistant

This can sound quite intimidating at first. However, most AI contract generators are easy to use and don’t require any technical knowledge at all. 

For example, Juro users simply submit a prompt in the platform asking for a contract or specific clause to be drafted. The contract AI then drafts the contract based on the information in your prompt and any additional guardrails and conditions you’ve set up. 

Yuliia Ivankiv, Legal Counsel at 3Commas, uses Juro’s AI contract generator to draft new clauses and language during negotiations with counterparties on service agreements.

“The counterparty might leave comments and amendments, but not propose a version of the clause. Juro’s AI function handles that for us and creates a clause when we need it,” Yuliia explains.

The result? Clauses or full contract drafts are generated in Juro in seconds using generative AI. But the thing that really sets Juro apart from other AI contract generators is the ability to set guardrails and draft terms that comply with your playbooks. 

Most AI contract generators won’t offer this functionality, meaning you’ll spend longer re-drafting and reviewing terms to make sure they’re aligned with the standardized rules you’ve established internally. 

Which AI contract generator is best?

If you’re looking for a way to create, agree and execute contracts up to ten times faster, a platform like Juro could be perfect for your business. 

Juro is the only platform that combines AI with a browser-native contract management platform that covers the entire contract lifecycle. With Juro, businesses like yours can:

1. Self-serve confidently on routine contracts, with flexible templates and workflows
2. Agree contracts ten times faster with Juro's powerful AI functionality
3. Sign contracts securely within the platform using Juro's native eSignatures
4. Collaborate on contracts in real time, without leaving their browser
5. Manage contracts end-to-end, all in one unified workspace

If this sounds like something your business would benefit from, fill in the form below to book your personalized demo.