The AI Clauses Appearing In Agency Contracts
The policy argument about AI in advertising is being conducted in public. The binding version is being written quietly into agency contracts, mostly at renewal, mostly by legal teams.
Four clauses recur, and an agency that has not read its own position on all four is negotiating blind.
The Four Clauses In Agency Contracts
Disclosure comes first: an obligation to tell the client when generated material is used, sometimes with a threshold, often without one, which makes it unworkable in practice since a tool sits inside most software already.
Ownership is second, and it is the one with real money in it. Who owns the output, who owns anything trained on the client's material, and what happens to both at the end of the relationship.
Indemnity is third: who pays when a third party claims the work infringes their rights. Agencies routinely sign an unqualified version of this without noticing that it now covers a class of risk they cannot inspect.
Training rights are fourth, and they run both ways. The client wants its material excluded from anything the agency builds for others. The agency needs the right to keep using its own tools.
Nobody wins the AI argument on a panel. It is being settled a clause at a time, at renewal.
The Clause Nobody Reads Properly
The one about tools. Some contracts now require approval for each tool used on the account, which sounds prudent and is unenforceable if the approval process takes longer than a project. An agency that signs it is agreeing to be in breach every busy week.
What A Reasonable Position Looks Like
Disclosure of material use rather than all use. Client ownership of output and of anything trained on client material. Indemnity proportionate to fee, which is the standard position in every other category of agency risk. And a tool list reviewed quarterly rather than approved per job.
None of that is exotic. It is the same commercial logic agencies already apply to freelancers, stock and music, applied to a category that arrived faster than the paperwork.
Related: where liability sits when it goes wrong.
More in The AI Shift.