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L3 · Contracting for AI: buying and selling7 min read

Negotiating AI terms with a clause library

A clause library turns AI contracting from case-by-case debate into a repeatable process. For each important clause it holds:

  • the model clause (your preferred wording);
  • negotiation notes (why it matters and what vendors usually say);
  • fallback positions you can accept;
  • the walk-away point;
  • red flags to spot in the other side's paper;
  • a risk rating (how much is at stake if the clause goes wrong).

How to use it in a deal

  1. Triage the use case first: the data and the stakes decide how hard to push.
  2. Compare the vendor's paper with your clauses and mark each as preferred, fallback, walk-away or missing.
  3. Calculate the deal risk: high-risk clauses settled at fallback or missing raise the overall risk more than low-risk ones.
  4. Escalate by rule: for example, any high-risk clause at walk-away or missing goes to the General Counsel.
  5. Record the outcome so the next deal starts from what you achieved.

Retention: a clause that changed under people's feet

Even good terms can be overtaken by events. In May 2025, in the copyright case brought by The New York Times against OpenAI, a U.S. magistrate judge ordered OpenAI to preserve and segregate ChatGPT output logs that would otherwise have been deleted (the obligation was lifted in October 2025). Deletion promises in contracts are always subject to legal holds and court orders, so your clause should require notice of such demands where lawful and limit what is kept.

What this means for the General Counsel

What this means for a General Counsel

A clause library is how a small legal team keeps up with a company buying dozens of AI tools. Build it once, agree it with procurement and IT, and let procurement handle deals that land at preferred or fallback.

The clause library tool in this hub gives you illustrative starting clauses, fallbacks and red flags, and a deal-risk score from your positions. Adapt the wording with your team for your jurisdiction and risk appetite.

Real example

On 13 May 2025, in the copyright litigation brought by The New York Times and other publishers against OpenAI in the Southern District of New York, Magistrate Judge Ona T. Wang ordered OpenAI to "preserve and segregate all output log data that would otherwise be deleted on a going forward basis until further order of the Court", including logs users had asked to delete. The general preservation obligation was lifted by a later order in October 2025, but the episode shows that a vendor's deletion promise can be suspended by a court at any time. Source: In re OpenAI copyright litigation (S.D.N.Y. 1:23-cv-11195) — Order of Magistrate Judge Ona T. Wang, 13 May 2025 (Justia) ↗ · Simon Willison — OpenAI no longer has to preserve all of its ChatGPT data, with some exceptions (23 October 2025) ↗ · Today's General Counsel — Court orders OpenAI to preserve ChatGPT conversations in copyright dispute (2025) ↗

Use it

Quick check · 3 questions

  1. 1.In a clause library, what is a 'walk-away' position?

  2. 2.Why weight clauses by risk when scoring a deal?

  3. 3.What does the 2025 preservation order in the New York Times case teach about deletion clauses?

0 of 3 answered

Sources

Last reviewed 2026-10-01.