Artificial Intelligence In Construction: Part IV – Technology – United States – Mondaq News Alerts

Artificial Intelligence In Construction: Part IV – Technology – United States – Mondaq News Alerts

United States: Artificial Intelligence In Construction: Part IV

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In our prior articles on artificial intelligence (AI) in
construction, we discussed 
machine learning

image recognition, sensors-on-site

building information modeling, and smart contracts
. As we
noted, significant legal issues will arise with the increasing
implementation of these technologies. These issues can be grouped
generally into: (1) risk allocation; (2) ownership and protection
of the technology, as well as the data input and outputs; and (3)
the applicable standard of liability. In this concluding article of
this series, we discuss those issues briefly below.

First, risk allocation. Specific contractual terms should be
drafted to take into account which party is responsible for which
aspects of the technology’s use. These terms should be
negotiated fully between the parties, with knowledgeable counsel
involved, and updated regularly. If a construction company has
created its own technology, the risk of failure or mistakes will
likely fall on the contractor. But if a contractor uses a third
party’s technology, the parties will need to pay close
attention to the apportionment of risk. The parties should address
what duties each party owes to the others regarding the technology
and its use. For example, the duty to observe and/or monitor the
technology should be assigned. Related questions to this duty are
how frequently, actively, and closely that monitoring needs to be
performed. Finally, the parties should address the issue of a flaw
in the technology being found. Is there a duty to disclose, who has
it, and is there a companion duty to fix the issue?

Second, in general, ownership of any technology or algorithm
rests with whoever created the technology. However, contractual
arrangements can be put in place that allow for licensing and use
of the technology. Such arrangements usually depend on whether a
contractor developed the algorithm itself or if a third-party
provider did. The same concerns emerge regarding the data – who
owns it, who can access it, and how long must the owner hold on to
it. An associated implication of the use of technology and data
ownership is its protection and security. With greater use of
connected devices and technology at worksites, contractors may open
themselves to hacking by third-party bad actors. Therefore,
privacy, confidentiality, and security are concerns that must be
accounted for. Otherwise, determining responsibility for a breach
could become very difficult and increase the likelihood of

Third, beyond determining who is responsible for injury arising
from the use of AI, the companion question is the standard of
liability that would apply. Would a strict liability regime —
where the party responsible for the use of the AI would be liable
without any need to prove negligence — or would a negligence
standard be employed? An evolving trend among commentators is to
suggest that strict liability will govern where fault cannot be
determined. A major concern for contractors is whether the use of
such technology will impose this higher level of


Technological advancement and the implementation of AI in
construction pose new legal implications and questions for industry
stakeholders. While most concerns can be addressed through careful
drafting of contracts, stakeholders should be aware of these new
and different legal issues. Moreover, important elements of
uncertainty exist regarding the legal standards, responsibilities,
and expectations of parties when integrating this technology into
construction. Nonetheless, early adopters potentially stand to gain
a competitive advantage over others who lag behind. The lesson, as
with construction generally, is careful contract drafting by
counsel fully informed and knowledgeable of the cutting edge

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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As we noted in our first article on artificial intelligence in construction, artificial intelligence (AI) is a broad term that generally refers to technology that uses algorithms to process data and simulate human intelligence.


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