Not legal advice. Sample language on this page is a starting point for counsel to adapt to the deal, the governing law and the agreement's own structure and numbering.
Where findings usually go
| Finding | Typical use |
|---|---|
| Copyleft dependency in a distributed product | Disclosure schedule; remediation as a covenant or closing deliverable; specific indemnity if not fixed by closing |
| Model weights under a non-commercial licence | Request the licence and any commercial terms; replacement plan and cost in the model |
| Customer data sent to a model provider | Request data processing agreements and the provider's terms; privacy rep and schedule |
| Heavy dependence on one model provider | Request the provider contract, rate limits and pricing terms; valuation and integration planning |
| Authorship concentrated in one engineer | Retention arrangements; confirm IP assignment from that person; transition plan |
| Inference cost growing faster than usage | Quality-of-earnings discussion; post-close plan; not usually a contract term |
Known issues are generally excluded from representations and warranties insurance, which is why findings from diligence are more often handled with a specific indemnity, a closing deliverable or a price discussion than with a general rep.
Document requests
A starting list for the data room when the target's product relies on AI models:
- Contracts, order forms and current pricing with each model provider, and any committed-spend agreements
- Data processing agreements covering data sent to model providers
- Licences for every third-party model or dataset used in production or training
- Twelve months of cloud and model-API invoices
- IP assignment agreements for all employees and contractors who wrote code, including founders
- The company's policy on AI coding assistants and any records of which tools were used
- An inventory of open-source components, if the company keeps one
- Any customer contract terms that restrict use of customer data with AI models
Sample AI representation
For counsel to adapt. Section placement and defined terms depend on the agreement.
Except as set forth in the Disclosure Schedule:
(a) the Company's use of third-party AI models and services
complies in all material respects with the applicable
licence terms, terms of service and acceptable use policies;
(b) no personal data or customer confidential information has been
provided to a third-party AI provider except under a written
agreement permitting that use;
(c) no Company Product incorporates or is distributed with software
under a copyleft or source-available licence (including the GPL,
AGPL or SSPL) in a manner that requires disclosure or licensing
of Company source code; and
(d) no Company Product uses model weights licensed only for
non-commercial use, or under use restrictions the Company is
not in compliance with.Sample specific indemnity
For identified issues that will not be fixed by closing. Amounts, escrow and timing are for the parties to negotiate; the memo's remediation cost range is one input.
Sellers shall indemnify Buyer for Losses arising from the matters listed on Schedule [X] (Identified Technical Matters), including the cost of remediation, [up to $___]. [Of the Purchase Price, $___ shall be held in escrow and released on [date], less pending claims, [or earlier on written confirmation by an independent technical reviewer mutually agreed by Buyer and Sellers that the Identified Technical Matters are resolved].]
If a technical reviewer confirms remediation, it should be someone both sides agree on. The firm that produced the findings is not the right choice for that role.
RWI underwriting
Underwriters review the buyer's third-party diligence reports and ask how diligence was done. The memo states what was scanned, by whom, which evidence supports each finding and what was out of scope, which is the level of detail an underwriting call tends to probe. Sharing the memo with an underwriter is covered by the engagement letter.
Engaging through counsel
A technical report prepared for a buyer is not privileged by default. If you want the work to support legal advice under privilege, discuss with your team whether counsel should engage CodeProvenance.ai directly. The engagement letter can be set up that way.