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Contracts are loaded with important details, but two critical provisions— the governing law clause and the venue (jurisdiction/forum selection) clause—often dictate where and how disputes get resolved. Quickly locating and understanding these clauses can save hours in contract review and risk assessment. With AI-powered tools becoming more accessible, many non-lawyers and legal professionals alike are turning to AI for faster contract navigation.

However, it’s crucial to maintain clear boundaries between using AI for legal information and avoiding unauthorized practice of law (UPL). This post will guide you on how to leverage AI safely for this task, including best practices for prompting, spotting issues, and respecting ethical boundaries.

Why the Governing Law and Venue Clauses Matter

The governing law clause specifies which state or country’s laws will govern the interpretation and enforcement of the contract. The venue or jurisdiction clause (sometimes called a forum selection clause) determines where any lawsuits or disputes will be resolved. These two clauses work in tandem and can dramatically affect litigation risk, cost, and strategy.

  • Governing law clause: Which legal rules apply.
  • Venue/jurisdiction clause: Where disputes will be heard.

Misidentifying or missing these clauses can lead to costly surprises if a dispute arises. That’s why quick, reliable identification is key.

The Common Pitfall: Thinking AI Can Provide Legal Advice

Before diving into AI-powered workflows, let’s get this straight: AI tools do not replace lawyers or legal advice. Using AI to interpret laws, give opinions on enforceability, or recommend specific actions crosses into the UPL territory for anyone not licensed to practice law in that jurisdiction.

Instead, AI should be treated as a smart assistant that helps you find legal information quickly—such as highlighting where the protopage governing law clause is in your contract or summarizing its text in plain language. It is not a tool for legal interpretation or advice.

Key Concepts: Legal Information vs. Legal Advice

Legal Information Legal Advice (Avoid in AI Usage) Definitions of governing law or venue clauses Determining if a clause is enforceable in a specific state Summaries of contract provisions Suggesting how to negotiate or revise clauses Flagging presence or absence of clauses Predicting outcome of legal disputes based on clauses Extracting clause location for user review Interpreting complex exceptions or cross-references

Setting up Safe AI Workflows for Contract Review

Avoiding UPL when using AI revolves around clear workflows and disclaimers that make it clear that AI-generated summaries or highlights are not legal advice. Here are the principles to follow:

  • Use AI as a search and summarization tool only. For example, ask “Where is the governing law clause in this agreement?” or “Summarize the venue clause in 2 sentences.”
  • Prompt AI to flag or extract clauses for human review. Have a legal professional or trained reviewer check the highlighted text before any decision-making.
  • Avoid asking AI for “advice” or “interpretation.” Keep prompts factual and focused on finding or summarizing content.
  • Keep a strong human-in-the-loop verification step. AI outputs are not flawless and should never be blindly copied into reports or shared externally as legal advice.
  • Clearly disclose to users that the AI output is informational only. Use disclaimers like “This summary is for informational purposes only and does not constitute legal advice.”

    • How to Prompt AI to Find Governing Law and Venue Clauses

    Effective prompting is key to getting useful results without crossing legal and ethical lines. Here are practical examples of prompts to use with AI tools like contract analysis software or language models:

    • Search location-based prompts:
      • “Find the governing law clause in this contract.”
      • “Locate the venue or forum selection clause and provide its section number.”
    • Summarization prompts:
      • “Summarize the governing law clause in plain English.”
      • “Provide a brief forum selection summary highlighting where disputes must be resolved.”
    • Issue spotting prompts:
      • “Does this contract specify both governing law and venue? List any missing elements.”
      • “Flag any non-standard language in the venue jurisdiction clause.”

    If you maintain a running list of “words that trigger UPL risk,” avoid using them in prompts that invite interpretation—phrases like “is this clause enforceable,” “how to negotiate,” or “what does this clause mean legally.”

    Example Workflow: Using AI to Extract and Summarize the Governing Law Clause

  • Upload the contract document to your chosen AI tool.
  • Run a search query: “Find the governing law clause.” The AI will return the specific text or the clause location.
  • Ask for a plain language summary: “Summarize the governing law clause in no more than 3 sentences.”
  • Review the AI output yourself or with legal counsel, making sure it matches the text.
  • Mark the clause location and summary for your team’s reference. Attach disclaimers that the summary is informational only.

    • Why This Matters: What Would You Show a Regulator?

    One of my favorite litmus tests when designing legal workflows with AI is to ask: “What would you show a regulator or ethics board?” If the AI-generated content looks like legal advice without proper oversight or disclaimers, that’s a red flag.

    Safe workflows are transparent, have clear human oversight, and never represent AI summaries as lawyer opinions. Maintaining this rigor protects your organization and upholds professional and ethical standards.

    Additional Tips and Best Practices

    • Build templates for prompts that are vetted for UPL safety.
    • Train users on the difference between “finding and describing” versus “advising.”
    • Maintain version control when saving AI outputs to track how summaries and findings were generated.
    • Periodically review AI tool accuracy by spot-checking against human review.
    • Document your AI workflow steps and disclaimers as part of your compliance records.

    Conclusion

    AI is a powerful tool for quickly finding and summarizing governing law and venue clauses in contracts. By focusing on legal information—not legal advice—and following safe prompting and review workflows, non-lawyers can enhance efficiency while staying within ethical boundaries.

    Remember: AI should assist and never replace human judgment or legal counsel when it comes to interpreting these critical contract provisions. Use AI wisely, keep a human review step, and always ask yourself what you’d show a regulator.

    For legal ops teams and small law firms, these practices are essential for adopting AI responsibly, improving contract review workflows, and mitigating risk related to UPL. Start with proper prompts, stay clear on your role, and your contract reviews will be faster and safer.

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    Posted by L. Derek Eldridge

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