General Contract Clauses: Customer Data AI Restrictions (Services Agreement)

by Practical Law Commercial Transactions

A Standard Clause for use in a commercial contract to establish restrictions on a service provider's use of customer data in training, modifying, or refining artificial intelligence (AI) tools, including generative AI (GenAI) applications. This Standard Clause includes detailed definitions of key terms such as "AI Technology," "AI Input," "AI Output," and "User Data," ensuring clarity on the scope of data usage limitations. It prohibits the use of customer data as AI Input or as prompts for GenAI tools without the customer's prior authorization, emphasizing the protection of confidential and personal information. The clause also maintains the confidentiality obligations of the service provider, affirming that these restrictions do not alter existing confidentiality commitments. Remedies for breaches include the right to seek specific performance and injunctive relief, highlighting the potential inadequacy of monetary damages alone. This Standard Clause is designed for business-to-business transactions within the US, with considerations for evolving AI laws and standards. It provides a comprehensive framework for negotiating AI-related data usage in service agreements, reflecting the rapid development of AI technologies and legal standards.