Can AI Write Contracts? Japan Justice Ministry Sets Guidelines

The Yomiuri Shimbun

18:15 JST, August 2, 2023

The Justice Ministry has released guidelines for the use of artificial intelligence for services that create and review contracts, defining what actions could be considered violations of the Lawyers Law and what ones would likely not be.

Digital technologies already in practical use in legal services are called “legal tech.”

“I hope the guidelines will lead to the sound development of legal tech,” Justice Minister Ken Saito said at a press conference after the Cabinet meeting on Tuesday.

The Lawyers Law prohibits non-attorneys from providing legal services and receiving fees, and carries penalties of up to two years imprisonment or a fine of up to ¥3 million.

The guidelines state that decisions on the legality of any action “will ultimately be left to the courts,” then lists cases in which there is a risk of violating the law, and cases that are considered legal.

Two examples of cases that may be in violation of the law are engaging in the following acts while charging fees: Legally considering individual circumstances such as details leading to a contract, and then preparing a contract that reflects the details or presenting a draft amendment; or indicating the degree of legal risk of a contract by taking individual circumstances into consideration.

On the other hand, the following two actions are considered to be legal: Creating a contract by selecting a relevant boilerplate contract from several such documents; or expressing caution by pointing out differences between the provisions of a contract under review and a boilerplate contract, by presenting general explanations or legal precedent about the provisions.

The Justice Ministry had earlier indicated that contract services using AI may be in violation of the Lawyers Law, depending on their content. This led companies that already provide such services to call for the ministry to indicate the legal scope in which they could operate. The companies argued that their activities should be legal as they do not produce legal analysis as lawyers do.

According to government sources, at least several thousand companies already use such existing services. The ministry stated that it is not aware of any services that clearly violate the law at this point.