As businesses increasingly rely on AI-enabled services, legal experts are warning that poorly drafted service contracts could expose both customers and suppliers to costly disputes. A new report from Pinsent Masons highlights that contracts often fail to clearly define the customer responsibilities—known as "customer dependencies"—required for AI systems to function effectively. If these obligations are vague, suppliers may argue that AI-related service failures were caused by the customer's actions rather than deficiencies in the AI solution itself.
The report explains that AI systems depend heavily on high-quality data, system access, timely customer decisions, software integrations, and human oversight. Suppliers may therefore seek broad contractual clauses requiring customers to provide accurate data, maintain compatible systems, obtain necessary approvals, and ensure privacy policies permit AI-related data processing. Customers, however, generally prefer narrower obligations to avoid being unfairly blamed when AI systems underperform. This makes customer dependency clauses an increasingly important area of contract negotiation.
Legal experts also caution against shifting excessive responsibility onto customers. While customers should provide reasonable cooperation and data, suppliers are expected to build AI systems capable of handling imperfect real-world information. Requiring perfectly clean or flawless data as a condition for acceptable AI performance could unfairly transfer the risk of AI shortcomings from the supplier to the customer, increasing the likelihood of contractual disagreements. Well-defined responsibilities, proportional risk allocation, and clear performance expectations are therefore essential for successful AI-enabled service delivery.
The report concludes that organizations adopting AI should update their service contracts to reflect the unique characteristics of AI-driven operations. Clearly defining customer responsibilities, supplier obligations, data quality expectations, and accountability mechanisms can help prevent disputes, improve service quality, and ensure fair allocation of risk. As AI becomes more deeply integrated into business services, robust contractual frameworks will be just as important as the technology itself.
