Having Technical Terms Explained in Plain Language: An Easy Way to Use Generative AI

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

Contracts and statutes contain many technical terms that are not used in everyday conversation. Consider a situation in which you are conveying the results of a review of a service agreement to a business department. Even if you explain, "This clause is a representation and warranty, and if it differs from the facts, it may lead to termination of the contract or a claim for damages," the frontline staff have no way of making a judgment if the meaning of "representation and warranty" itself has not gotten through to them. Communicating in technical terms leaves what needs attention unshared and causes more back-and-forth over confirmations and revisions.

Even when you think you have explained the definition of a term, the other person may not know what to check next. I think the role of legal is not limited to understanding precise legal terminology; it is to translate it into words that business staff can use to make practical decisions.

You can use ChatGPT, Claude, Gemini, and similar tools to create drafts of such explanations. Rewriting technical terms in plain language or replacing them with familiar analogies is a well-suited use of AI, which excels at generating text.

Specifying the Expression to Suit the Reader

To have technical terms explained clearly, it is effective to specify in advance whom the explanation is for. Simply adding an instruction such as "Please explain this for a new employee in a business department with no legal knowledge" or "Please include analogies so that sales staff can understand" changes how plain the answer is. If you do not specify the audience, you may get back a stiff explanation like a discussion between legal practitioners and not obtain the clarity you intended.

For example, when asking about "surviving obligations" in a non-disclosure agreement (NDA), if you do not specify the audience, the answer tends to be formal, such as "obligations whose effect continues after termination of the contract." If you specify "for a new employee," it becomes easier to draw out an expression grounded in daily work, such as "obligations to keep secrets in accordance with the contract even after the contract term has ended." Note that the survival period for confidentiality is not necessarily limited to a few years, and you need to keep in mind that the survival period and the information covered differ depending on what the contract provisions say.

Example Prompts for Drawing Out Concrete Examples and Points to Note

When conveying an abstract concept, having the AI output familiar concrete examples and practical points to note together with a rephrasing of the meaning makes it easier to understand. Concepts that legal is often asked to explain include the following.

• Duty of due care of a prudent manager (the duty of a mandatary under a mandate or quasi-mandate to exercise the care normally expected given the nature of and circumstances surrounding the work undertaken). It is not a duty imposed only on certain qualified professionals, and can be explained as the duty to carry out the work with the care appropriate to the work undertaken and one's position.
• Default (failing to perform an obligation owed under a contract or otherwise in accordance with its terms). It refers to situations such as not delivering by the due date or not performing the agreed work, and it is the trigger for considering legal remedies such as damages or termination, depending on the requirements of the Civil Code and the contract.
• Joint and several guarantee (a form of guarantee under which the creditor can demand performance directly from the joint and several guarantor within the scope of the guarantee agreement, even before demanding payment from the principal debtor or enforcing against the principal debtor's assets). The guarantor cannot refuse by saying, "Please demand payment from the person who borrowed first." However, there are cases in which the guarantor can refuse the demand on grounds the principal debtor could assert, for example, that the original debt has already been repaid.

Please explain the following legal terms for staff in a business department who are not familiar with law. For each, please give (1) a one-line meaning, (2) a familiar analogy, and (3) points to note in practice, in that order. If you must use a technical term, add a brief explanation in parentheses right there. The terms are as follows. [Terms] representation and warranty / duty of due care of a prudent manager / default

Further, when extracting clauses from an actual contract to create an internal glossary, the following variation can be used.

Please extract the technical terms that appear in the following contract and put them in the form of a glossary. Please output a table with the columns: term / plain meaning / how it is used in this contract / points to note.
- The readers are staff in a business department handling law for the first time
- Do not add general discussion that is not written in this contract; explain only within the scope of what is written
- For any term whose meaning is ambiguous and cannot be determined, write "needs confirmation"

[Paste the contract here (with company names, individual names, etc. redacted)]

Including an instruction to exclude general discussion not written in the contract makes it easier to prevent the output of commentary that strays from the reality of the contract.

Points to Note and Errors in Plain-Language Explanations

First, plain expressions can be mistaken for precise legal definitions. For example, the rules on "warranty against defects" were revised into "contractual non-conformity liability" by the amendment to the Civil Code that took effect in 2020, but for contracts concluded before the amendment, the former term may still carry meaning. A plain rephrasing merely aids initial understanding, and it is essential to confirm the final legal position in the statutory provisions or specialist texts.

Second, the meaning of a term can be interpreted without considering the context of the contract. Even the single word "acceptance inspection" carries different implications for the subject and period of the inspection in an outsourced system development engagement and in a sale of goods. Applying general discussion without taking into account the type of contract and whether your company is the client or the contractor can lead to discrepancies with the actual interpretation of the contract.

Third, in prioritizing simplicity, conditions that limit liability and relate to the allocation of risk can be left out. If "exemption" is explained simply as "not being liable," the core conditions, namely under what grounds for exemption and up to what scope of damage liability is limited, may be overlooked.

In addition, when entering the text of a contract, it is a prerequisite not only to redact proper nouns but also to check your organization's usage rules and security environment and whether the settings ensure that input data is not used for training or similar purposes. It is important not to accept AI output at face value, and to maintain a procedure in which a human checks it against the actual contract provisions, the governing law, and the allocation of risk.

Expanding Into an Internal Glossary and FAQ

Accumulating everyday questions such as "What is a representation and warranty?" or "What does a restriction on subcontracting mean?" into an internal glossary or FAQ makes explanations more efficient. You can put the materials in order by having generative AI create a first draft from past memos on handling inquiries and having legal staff revise it to fit your company's operating standards. When the understanding of terms is shared within the company, business departments read contracts from a common perspective, and issues are more likely to be organized by the time they consult legal.