AI for commercial lawyers: supply, distribution and services contract review in Word

Commercial lawyers handle the contracts that keep a business trading: supply and purchase agreements, purchase order terms, distribution and reseller agreements, master services agreements and NDAs. Volume is high, the issues repeat, and the client wants a clean turn quickly. An AI assistant in Word can take the first pass and the markup, so your time goes on the commercial judgment calls.

Where AI helps in a commercial practice

• Playbook review for the contracts that have one: LexDraft has built-in playbooks for NDAs, SaaS MSAs, DPAs and services agreements.
• General review for everything else, such as supply and distribution agreements, with risky clauses and missing standard terms flagged and graded Critical, High, Medium or Low.
• Word-level redlines as native tracked changes.
• Clean documents. Rule-based checks catch undefined terms and broken cross-references across the agreement and its schedules.

Sale of goods: the UCC Article 2 points to check

• Battle of the forms (UCC 2-207). A purchase order and an acknowledgment on different terms can still form a contract. Between merchants, additional terms in the acceptance become part of the contract unless the offer limits acceptance to its terms, they materially alter it, or the other side objects. Many courts knock out conflicting terms and fill the gap with UCC defaults. Check whether your client's terms make acceptance expressly conditional on assent to them, and use a signed master agreement where you can.
• Statute of frauds (2-201). A sale of goods for $500 or more generally needs a signed writing, with exceptions such as the merchant's confirmation rule.
• Warranties (2-313 to 2-315). Express warranties, the implied warranty of merchantability and fitness for a particular purpose.
• Disclaimers (2-316). A written disclaimer of merchantability must mention merchantability and be conspicuous; a disclaimer of fitness must be in writing and conspicuous.
• Limited remedies (2-719). A repair-or-replace remedy can fail of its essential purpose, which reopens general remedies. Excluding consequential damages is allowed unless unconscionable, and for personal injury from consumer goods it is presumed unconscionable.
• Limitation period (2-725). Four years from breach. The parties can shorten it to not less than one year but cannot extend it.
• Modification (2-209). A modification needs no consideration, and a signed-writing requirement for changes is generally enforceable.
• Requirements and output contracts (2-306), adequate assurance (2-609) and commercial impracticability (2-615) for long-term supply.

Goods, services or both

Many courts use the predominant purpose test (Bonebrake v. Cox, 8th Cir. 1974) to decide whether a mixed contract is governed by Article 2 or by common law. The answer changes warranty, limitation and gap-filling rules, so draft as if either could apply.

Other commercial terms to check

• Limitation of liability. The cap, what it is measured against, and the carve-outs for indemnity, confidentiality and data breaches.
• Indemnities for third-party IP and product liability claims, with defence and settlement control.
• Pricing, price changes and most-favoured-customer terms; auto-renewal and termination for convenience.
• Exclusivity and territory in distribution and reseller agreements, and what happens to inventory on termination.
• International sales. The UN Convention on Contracts for the International Sale of Goods applies automatically between parties in contracting states unless the contract excludes it (Article 6). Exclude it expressly if you want the UCC.
• Governing law. New York General Obligations Law 5-1401 lets parties choose New York law for transactions of $250,000 or more without other contacts, and Delaware has a similar rule at $100,000 (6 Del. C. 2708).

A workflow in Word with LexDraft

1. Open the counterparty's draft in Word and open LexDraft.
2. Pick a playbook if one fits (NDA, SaaS MSA, DPA or services); otherwise run a general review. Select the governing state.
3. Deal with every Critical and High finding first, then the client's commercial priorities.
4. Run the defined-term and cross-reference checks.
5. Accept the redlines you agree with as tracked changes, add your own and send the client a short note on the top risks.

What LexDraft does not do

LexDraft has no dedicated supply or distribution playbook. It does not manage purchase orders, track renewals or give legal advice. AI review can miss issues or be wrong; read the final document yourself.

Using AI ethically in this practice

ABA Formal Opinion 512 (July 2024) and many state bars say the same four things: understand the tool, protect client confidences, check every output, and bill fairly for AI-assisted work. Our state-by-state guide to AI ethics for solo lawyers summarises the guidance in 20 states and D.C.

Plans

Start on the Free plan: 5,000 generated words a month, no time limit and no credit card. Professional is $99 a month or $990 a year for 100,000 words a month. Business is $199 a month or $1,990 a year with unlimited words. LexDraft runs in Word 365 (Windows and Mac), Word 2021 and Word on the web, and it does not use customer documents to train models.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.