Successful Case of Reviewing Risks in an AI Adoption and Utilization Consulting Agreement and Restructuring the Contract

The client was planning to enter into a substantial contract to introduce consulting based on new technology with an external specialized company. However, given the nature of AI services, there was a high risk of disputes if the definition of concrete deliverables, the inspection method, and the criteria for judging the adequacy of outputs were unclear. In fact, the draft contract contained numerous clauses with high variability in the scope of the contract and unclear methods for cost adjustment, raising concerns about disputes over excessive cost claims or "inadequacy of deliverables." Accordingly, the client requested advice, judging that review and adjustment were necessary to minimize contractual risk by reflecting the special nature of AI consulting.

The core issue in this case was to clarify the structure of the scope, inspection, payment, and termination of the AI consulting services so that no interpretation unfavorable to the client would arise.

First, we reviewed the ambiguity of the provisions defining the scope of services. In the draft, the consulting scope was defined comprehensively, leaving room for the counterparty to demand excessive provision of materials or additional services. We therefore advised clarifying a "reasonable duty of cooperation within the scope of the contract's purpose" and supplementing restrictive provisions allowing refusal or adjustment in the event of additional demands.

Second, the structure for preventing disputes over inspection procedures and opportunities for supplementation was insufficient. In the existing draft, the inspection period and the number of supplementations were left blank, creating the risk that the counterparty could repeatedly demand supplementation, or conversely, that an "automatic passing of inspection" unfavorable to the client could be established. We therefore presented a direction for adjustment to specify the inspection period, the number of supplementations, and supplementation standards based on objective and quantitative criteria.

Third, we identified a lack of consistency in the adjustment system for payment and changes in scope. The contract merely provided that payment could be adjusted if the scope of services changed, lacking clarity on the monetary basis, adjustment method, and grounds. Considering that this is an area where disputes frequently arise in practice, we advised separately documenting the standards for payment adjustment in the event of expansion or reduction of scope, and strengthening clauses prohibiting unilateral changes without agreement.

Fourth, the effectiveness of the termination clause was also an important issue. If the grounds for immediate termination, the procedure for demanding correction, and the scope of damages were not clearly organized, there was a risk that the locus of responsibility could become ambiguous in a long-term project. We therefore specified the definition of cases where achieving the contract's purpose is impossible and the standards for attribution of fault, thereby blocking the risk so that the client would not bear an unnecessary burden of damages.

As a result of the advice, the client was able to secure a systematic, risk-management-oriented contract structure that reflected the characteristics of the AI consulting project. As the scope of services, inspection method, payment procedures, and termination requirements became clear, the risks of excessive cost demands, deliverable disputes, inadequacy controversies, and responsibility disputes that could arise during contract execution were effectively reduced. In particular, the AI industry is a field where the pace of technological change is fast and the objective evaluation of deliverables is difficult, so this contract adjustment holds significant meaning in that it laid the foundation for the client to utilize a standardized risk control model in similar future projects.