{"id":4875,"date":"2024-06-04T18:44:00","date_gmt":"2024-06-04T16:44:00","guid":{"rendered":"https:\/\/djp-a9vm.1wp.site\/?p=4875"},"modified":"2026-10-19T19:05:25","modified_gmt":"2026-10-19T17:05:25","slug":"will-artificial-intelligence-replace-corporate-lawyers-in-drafting-contracts","status":"publish","type":"post","link":"https:\/\/djp.pl\/en\/will-artificial-intelligence-replace-corporate-lawyers-in-drafting-contracts\/","title":{"rendered":"Will artificial intelligence replace corporate lawyers in drafting contracts?"},"content":{"rendered":"

Can AI development and the free, widely available ChatGPT[1]<\/a> replace a lawyer\u2019s knowledge and experience? I examine a ChatGPT-drafted loan between a limited liability company and its board member, comparing its information with legal requirements and identifying risks.<\/p>\n

ChatGPT\u2019s \u201cadvice\u201d and analysis<\/h2>\n

The prompt \u201cprepare a loan agreement between a board member and a limited liability company\u201d generated:<\/p>\n

\n

Here is an example outline. Such agreements should be carefully tailored to the circumstances. Always consult a corporate lawyer before drafting and signing.<\/em><\/p>\n

LOAN AGREEMENT NO. [number]<\/em><\/p>\n

Concluded on [date] between [board member\u2019s name], residing at [address], PESEL [number], the \u201cLender\u201d, and [company name], registered office [address], KRS [number], NIP [number], REGON [number], represented by [name and position], the \u201cBorrower\u201d.<\/em><\/p>\n

\u00a7 1. Subject<\/em><\/p>\n

1. The Lender lends [amount] (in words: [amount]) z\u0142oty to the Borrower.<\/em><\/p>\n

2. The term is [period] from signing.<\/em><\/p>\n

\u00a7 2. Interest<\/em><\/p>\n

The loan is interest-free.<\/em><\/p>\n

\u00a7 3. Repayment<\/em><\/p>\n

1. The Borrower will repay the full amount by [date].<\/em><\/p>\n

2. Repayment is in one instalment.<\/em><\/p>\n

3. Payment will be transferred to the Lender\u2019s account [number].<\/em><\/p>\n

\u00a7 4. Security<\/em><\/p>\n

The Lender receives a third-party surety from the Borrower in the form [security, e.g. property or personal surety].<\/em><\/p>\n

\u00a7 5. Final provisions<\/em><\/p>\n

1. Effective on signature by both parties.<\/em><\/p>\n

2. Unregulated matters are governed by the Civil Code and relevant limited liability company law.<\/em><\/p>\n

3. Two identical counterparts, one per party.<\/em><\/p>\n

[Date and signatures]<\/em><\/p>\n

Adapt the agreement to specific conditions and national law and carefully consider clauses, especially security. Always consult a lawyer before signing.<\/em><\/p>\n<\/blockquote>\n

ChatGPT itself twice stresses professional review, legal adaptation and the template\u2019s illustrative, general nature. Correct and fair as this warning is, it also limits potential provider liability for adverse consequences of the \u201cadvice\u201d.<\/p>\n

The draft gives only general principal terms: amount, repayment, interest and possible security. Its generality may make it insufficient. Proper clauses require detailed consideration and lawful regulation.<\/p>\n

Every transaction requires comprehensive analysis of risks and conditions for validity and effectiveness. An available or generated template may not suffice even for a simple act.<\/p>\n

A further prompt asking about risks and requirements generated:<\/p>\n

\n

A loan between a company and a board member involves risks and requirements for both. Consider:<\/em><\/p>\n

Company risks:<\/em><\/strong><\/p>\n

    \n
  1. Conflict of interest: a manager borrowing from the same company may compromise objective board decisions.<\/em><\/li>\n
  2. Insolvency: inability to repay may affect the company\u2019s finances.<\/em><\/li>\n
  3. Company image: favourable terms for the member may affect perceptions among shareholders, investors and the public.<\/em><\/li>\n<\/ol>\n

    Company requirements:<\/em><\/strong><\/p>\n

      \n
    1. Corporate approval may be required under the articles or law, for example by a general meeting or supervisory board.<\/em><\/li>\n
    2. Transparency: clear, documented terms and compliance with procedures.<\/em><\/li>\n<\/ol>\n

      Board member risks:<\/em><\/strong><\/p>\n

        \n
      1. Financial pressure as debtor may affect independent management decisions, particularly if the company faces difficulties.<\/em><\/li>\n
      2. Legal obligations: failure to fulfil financial duties may lead to legal action.<\/em><\/li>\n<\/ol>\n

        Board member requirements:<\/em><\/strong><\/p>\n

          \n
        1. Understand repayment, interest, penalty provisions and consequences of default.<\/em><\/li>\n
        2. Be aware that corporate approval may be needed and prepared for refusal.<\/em><\/li>\n<\/ol>\n

          Always consult a corporate and financial lawyer. Careful preparation and documentation minimise risk and ensure compliance.<\/em><\/p>\n<\/blockquote>\n

          First, this contradicts the earlier draft: the company was borrower, but the risks assume it is lender, within the same chat. A non-lawyer might also conclude there are no special requirements, the template is sufficient, and approval is optional because limited liability companies often lack supervisory boards and do not have the joint-stock company\u2019s general meeting mentioned. Apart from approval and conflicts, the identified risks were commercial rather than formal legal requirements.<\/p>\n

          ChatGPT also answers only questions asked and does not anticipate further issues. A non-lawyer may not realise additional analysis is needed.<\/p>\n

          Issues ChatGPT omitted<\/h2>\n
            \n
          1. Corporate approvals<\/li>\n<\/ol>\n

            The vague reference to possible corporate approval is insufficient.<\/p>\n

            Loans with board members face restrictions because directors represent the company and could otherwise contract without shareholders\u2019 consent or knowledge.<\/p>\n

            Shareholder approval is necessary regardless of who lends. It must be expressed by resolution, generally minuted with strict formal requirements.<\/p>\n

            A subsidiary contracting with a parent\u2019s board member, commercial proxy or liquidator may also require the parent\u2019s shareholder approval.<\/p>\n

            Missing consent may invalidate the agreement.<\/p>\n

            The articles may require additional approvals, an issue entirely omitted.<\/p>\n