What nobody tells you about AI’s changing role in contracts
Let’s get this out of the way: Contracts are fundamentally broken.
And AI is about to fix them in ways nobody’s talking about.
What do I mean when I say they’re “fundamentally broken?” I mean they’re not built to serve the purposes for which we use them.
Say we started the world from scratch, and I asked you to come up with a way to clarify the terms of an agreement — an apartment lease, for example.
Would your ideal solution be a 50-page document packed with obscure legal terminology hardly anybody understands or even reads?
Of course not. That’s a fundamentally broken tool for the job.
But contracts haven’t really evolved all that much since the Middle Ages. We’re still loading them up with 15 pages of clauses to account for every possible edge case that might happen 0.1 percent of the time.
And what if that edge case actually does happen? Are you really going to take a vendor to court over a late $1,000 payment? Is Apple or Salesforce going to take you to court over that amount of money?
Of course not. It’s an absurdly useless system.
And what I’m seeing right now with our customers at Concord is that, after 10 years of contract automation, AI is finally pushing us toward a radically different approach to contracts:
- Simple term sheets — no more convoluted clauses
- Visual presentations — no more walls of text
- Standardized formats — no more vendor-specific pages
And what do you think happens when companies adopt this new approach? Do they get sued out of existence in court?
Just the opposite. They discover that 90 percent of their agreements never get redlined, negotiated, or litigated at all. They just get signed, and that’s that.
Over the past decade, we’ve already seen formatting documents become obsolete. And before long, the entire concept of a “contract” is going to fundemantally transform.
In 2035, formalized agreements will still exist, obviously. But I predict that no human will actually review them. Instead, AIs will negotiate directly with one another, each trying to optimize the deal for its own user.
This isn’t just sci-fi speculation. It’s already starting to happen now, in Concord, when our customers apply contract analytics to AI-extracted data, to negotiate better terms from vendors.
The next logical step is for both parties to let agentic AI handle more of the negotiation. And when that becomes the norm in the early 2030s, “contracts” as we know them today simply won’t have a raison d’etre anymore.
What about you? Are you ready for agreements to actually make sense?
Matt Lhoumeau is the CEO and co-founder of Concord, a leading provider of Agreement Intelligence solutions. Concord empowers growing businesses to make smarter operational decisions by unlocking actionable insights from contracts, and is trusted by over 1,500 companies worldwide.
