AI-Assisted Contract Review: Legal Risks, Data Privacy Challenges And The Need For Responsible Ai Governance In India
Alpana Mishra, ILS Law College
ABSTRACT
Artificial Intelligence (“AI”) is rapidly transforming commercial contract review. AI-enabled tools can assist legal professionals in summarising agreements, identifying contractual risks, comparing clauses against approved positions, extracting obligations and accelerating repetitive review activities. In increasingly technology-driven contracting environments, the use of approved AI tools is moving from experimentation towards integration into routine legal and commercial workflows.
The benefits of AI-assisted contract review, however, are accompanied by significant legal and governance concerns. Commercial agreements routinely contain confidential business information, personal data, intellectual property, pricing information, security requirements and commercially sensitive negotiated positions. Processing such information through AI systems may therefore raise questions relating to confidentiality, data protection, cybersecurity, accuracy, accountability and professional responsibility.
Against the backdrop of India’s evolving digital regulatory framework, particularly the Digital Personal Data Protection Act, 2023 (“DPDP Act”) and the Digital Personal Data Protection Rules, 2025 (“DPDP Rules”), this article examines the principal benefits and legal risks associated with AI- assisted contract review. It argues that organizations should move beyond broad statements of AI ethics and develop practical AI and data-privacy playbooks, risk-based review mechanisms and meaningful human oversight.
The objective should not be to prevent AI adoption in legal services. Rather, organizations should create governance structures that allow technological efficiency to operate within clearly defined legal, privacy and professional boundaries.
Keywords: Artificial Intelligence, Contract Review, Generative AI, Data Privacy, DPDP Act, AI Governance, Legal Technology, Contract Lifecycle Management, India.
