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The 5 Kinds of Contracts Every AI or Robotics Company Should Have

The AI/robotics world is still a relatively new one, and therefore the laws governing their usage are still in the process of being formed. Nonetheless, it is critical that contracts for AI/robotics be utilized in their sale/usage as these machines require the same type of protection that other services do.

Which contracts need to be signed, though? Well, there are five major types that every company in the industry should make note of so as not to fall victim to data leaks, sub-par services, or other unexpected problems.

1. Proprietary information contracts

This is arguably the most important agreement that will be signed between AI/robotics companies and other participating parties. The nature of the industry is unique and raises a lot of questions with regard to ownership:

  • Who has the legal right to data ownership? If a customer uses AI in a given sphere to create his or her own information, does that information then legally belong to the customer, or the company that invented the technology?
  • If information is passed to a third party, is that then considered a breach of the agreement between the company and the customer?
  • How much data can a customer rightfully exact from a providing company?

All of these and related questions must be laid out clearly in a proprietary information agreement. Breaches to these points threaten the very integrity of AI itself. In signing such an agreement, all relevant parties can rest assured that business will be conducted straightforwardly, according to plan, and only the rightful creators of information will be able to call it their own.

2. Sales contracts

If a company signs an agreement allowing customers to use its robots, it should create a sales agreement in the same way that other sales would be conducted. Just like other sales agreements, these legal contracts for AI/robotics should lay out the services to be provided, the circumstances in which these services are expected to be fulfilled, any qualifications that might come into play, and the mechanism and timeline for payments.

As with other types of services, it is critical that AI/robotics contracts be drawn up and carried out accurately. Statistics indicate that many contracts are poorly constructed and therefore participating companies end up losing large amounts of money as a result. It is particularly important that these a contract for robotics company or AI company be carefully designed in new areas such as AI/robotics because these fields are ones that are still not clear to many people.

As sourcing vendors can be a tricky business process anyway, the signing of a sales contract by both will ensure that the services and/or products are delivered and lay out the conditions for what will happen if they are not.

Sales contracts for robots should include the following components:

  • Definitions and conditions
  • Application of conditions
  • Payment conditions
  • Delivery conditions
  • Potential risks

3. Vendor contracts

As with direct sales, it is also important that third-party vendors of different sorts (retail vendors, sourcing vendors, store vendors, etc) sign contract for AI company so that services and information provision are fully laid out for both parties.

Lawrina offers an online vendor agreement template that lays out the conditions for businesses and contracting vendors clearly. These contracts can, of course, be modified to suit the purposes of any particular agreement, but it would pay to familiarize yourself with the primary conditions first as they serve as the basis for most contracts.

4. Non-disclosure Agreements

Another type of contract that should be signed by the relevant parties in the use of AI and robots is a non-disclosure agreement (NDA). What an NDA does is ensure that the information that comes out in the use of AI/robots is treated as confidential.

NDAs are a standard type of agreement for many other services, and AI/robots should be treated similarly. They are an important component of legal agreements because they prevent information from being leaked to third parties or competitors.

If an NDA is breached, the consequences could include fines, lawsuits, or even more serious penalties. Therefore, it is essential that parties enter into them in order to protect their information.

This type of contract is particularly important in the world of AI/robotics as new information is coming out all the time that can make major differences in advancements in the field. If a pioneering company wants to keep its innovations private, it is essential that it utilize these types of contracts so as not to allow its proprietary research to leak to the competition prematurely.

The essential components of an NDA are the following:

  • A detailed description of what information is to be kept confidential
  • A list of the obligations of both (or all) of the parties to the agreement
  • A list of any exceptions that there might be to the confidential information
  • The length of time of the agreement
  • A description of potential penalties if the agreement should be breached

The NDA could apply to any parties involved in the use of AI/robotics, including:

  • Customers utilizing the technology
  • Vendors acting between companies and customers
  • Any other businesses working alongside customers
  • Any other outside parties

5. Contracts governing the use of social media

Just as companies need to exercise caution with regard to the leaking of confidential information in general, so too should they bind customers to agreed upon usage of information in social media. This includes websites, mobile apps, and any other public forums where information can be disclosed.

Doing business in AI and robotics is a very tricky business. And with technology increasing at such a fast rate, it is due to get even trickier as time goes on. Legal experts need to stay on top of advancements as closely as possible so as not to miss critical points in drawing up contracts. And the parties utilizing those contracts need to keep up on what to look for so that they only utilize the best and most detailed services.

Keep on top of industry changes

As mentioned above, this is an industry that is constantly evolving, with technology running ahead of most of us at an unheard of pace. Companies and other interested parties need to stay on top of changes as closely as possible so as not to face unexpected issues in conducting business.

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