PRIV-04 · 01
Contracting With AI Vendors: Training Data, Output Rights, Security, and Liability
Buying an AI system transfers your data and imports someone else's legal exposure. This brief works the seven terms that decide who carries that risk, with realistic fallback positions.
- Default vendor terms often permit training on customer inputs; the restriction must be written, cover outputs, and bind subprocessors.
- Output ownership is assigned by contract, but assignment cannot create copyright the law does not grant to purely machine-generated material.
- IP indemnity is the term most negotiated and most conditioned; read the exclusions, caps, and required-use conditions before relying on it.