Artificial Intelligence (AI) was created to gather, organize and present information. Ability to draft a legal construction contract should be a good test for any large language AI model:
Given current enthusiasm for AI models, that doesn’t seem too much to ask. So I’ll ask again. Results of my first two attempts were summarized in January and April posts. Those two tries used Microsoft’s Copilot. That’s just one AI tool. This time I’ll test a few more AI apps: Google’s Gemini AI, Perplexity, Meta’s AI, ChatGPT and Elon Musk’s Gork, all using the same query as in April.
My measure of success: “Is it a legal, enforceable contract?” Twenty-two states require specific notices and disclosures in residential construction contracts. Without these required notices and disclosures, some state courts won’t enforce the agreement. Other states will enforce the contract but suspend the contractor’s license, impose a fine, or even jail time on the contractor.
Again, I tested using a hypothetical California construction project. Legal California contracts need 31 notices and disclosures when improving an owner’s residence. Here’s what I found.
Gemini’s contract was 6 nicely organized pages. Paragraphs were headed in bold. Clauses were identified with bullet points. Two pages were devoted to California’s required notices and disclosures. I like that. But this section is totally foolish. The notice required by B&P Section 7030 appears twice, once with the board’s phone number and Web address and a second time without either. Gemini’s contract includes disclosures about asbestos (H&S 25916) and lead paint (H&S 25410). Nice try! But neither disclosure is required in a construction contract. Yet six contract notices required by California B&P section 7159 were omitted entirely: (1) "You are entitled to a completely filled in copy of this agreement . . .” in 12-point bold type, (2) owner has the right to request a performance and payment bond, (3) a notice requiring release of liens after payment, (4) a notice explaining the owner’s right to cancel (initialed), (5) a sample change order form, (6) the 415-word warning about mechanics liens. Also missing: two checklists for homeowners required by 16 California Code of Regulations Section 872 and 872.1. The Gemini contract includes a section on arbitration. That’s fine. But the section is worthless. California courts won’t enforce an arbitration clause against homeowners unless the contract includes a 150-word statement initialed by the owners giving up their right to sue. Omitting those 150 words from the contract doesn’t show much intelligence, either artificial or otherwise.
Perplexity produced the shortest contract, only 2 pages. The contract included only 16 of the 31 required notices. But that’s being generous. For example, the official California mechanics lien warning has 415 words. Perplexity’s abbreviated version of the warning had only 39 words. Notable omissions in the Perplexity contract: (1) a statement about written change orders and a change order form, (2) information about the state license board including a phone number and address, (3) the checklist for homeowners.
Meta AI’s contract was a little more than 2 pages. Bold section headings made the contract easier to read. But only 14 of the 31 required notices and disclosures appeared in the contract. Notable omissions included the mechanics lien warning, the CSLB homeowner’s checklist and a sample change order form. Worse, some of the contract was simply wrong. For example, California limits the initial payment on home improvement jobs to $1,000. The Meta AI contract required a $16,976 down payment. Another example. The contract query specified two owners. There was just one signature line for “owner” on the Meta AI contract. Getting just one signature is asking for trouble if a husband and wife are the owners.
Chat GPT offered a 4-page contract and gave at least a summary version of 18 of the 31 required notices and disclosures. Omitted in the Chat GPT contract: (1) “You are entitled to a completely filled in copy . . .” in 12-point bold type, (2) a statement on release of liens in exchange for payment, (3) the agreement by owners to binding arbitration (initialed), (4) notice that the owner could require a performance or payment bond, (5) the CSLB checklist for home owners, (6) the owners’ acknowledging receipt of California’s 3-day right to cancel, (7) the sample change order form.
Grok’s contract was 6 pages and included some surprises: The progress payment schedule had seven detailed job phases. That’s good. What wasn’t good (and maybe out of compliance with California law): progress payments were heavily front loaded. Initial payment for demolition was 13% of the contract price. Final payment was less than 2%. No lender is going to like that. Grok’s mechanics lien notice is an abbreviated summary of the notice required by California B&P section 7159. Why doesn’t Grok show the full official notice? That’s a mystery to me. Grok prints a paragraph on the 3-day right to cancel. But Grok assumes the 3 days starts running from the date the contract is printed. Wrong on two counts. First, “3 days” is actually 3 business days (excluding Sundays and holidays). Second, the 3 days doesn’t start running until the notice of right to cancel is delivered to an owner, usually the signature date. The Grok contract cites California B&P section 7159 five times. Obviously, Gork’s algorithm found the statute. Why then doesn’t the Gork contract include all notices and disclosures required by section 7159? Omitted from the Gork contract: (1) "You are entitled to a completely filled in copy of this agreement . . .” in 12-point bold type, (2) owner has the right to request a performance and payment bond, and (3) a sample change order form.
My Conclusion
AI’s ability to draft legal and enforceable home improvement contracts (at least for California) isn’t quite invented yet. An attorney turning out contracts like the five reviewed here would be bordering on malpractice. Construction Contract Writer is a far better choice. The trial version is free.
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