AI Disclaimer

1. Purpose

This notice sets out important information regarding the nature, capabilities, and limitations of AI-powered systems delivered by Applegate Business Services Ltd (trading as Applegate AI), and the allocation of responsibility between Applegate AI and the Client in respect of AI-generated outputs.

This notice supplements the Master Services Agreement and forms part of the contractual framework between the parties. It is incorporated by reference into every Statement of Work. The Client’s engagement of Applegate AI constitutes acceptance of this notice in full.

2. Nature of AI Systems

2.1 Probabilistic Output

AI systems generate outputs based on statistical pattern recognition applied to training data. All outputs are probabilistic in nature. Applegate AI does not warrant, represent, or guarantee the accuracy, completeness, currency, reliability, or fitness for any particular purpose of any AI-generated output.

2.2 Hallucination and Error

AI systems may generate outputs that are factually incorrect, misleading, fabricated, contextually inappropriate, or inconsistent across interactions. This phenomenon, commonly referred to as hallucination, is an inherent and known characteristic of current AI technology. Applegate AI accepts no liability for loss arising from the Client’s or any end user’s reliance on hallucinated or erroneous AI output.

2.3 Not Professional Advice

No output produced by any AI system delivered by Applegate AI constitutes legal advice, financial advice, medical advice, investment advice, or any other form of regulated professional advice, irrespective of how the system has been configured or described in pre-contractual communications. AI outputs must not be relied upon as a substitute for qualified professional consultation.

2.4 Non-Determinism

AI systems may produce materially different outputs in response to identical inputs. Output consistency is not guaranteed.

2.5 Knowledge Limitations

AI systems built on large language models have defined knowledge cutoffs and may not reflect recent events, regulatory changes, or updated information. The Client is solely responsible for validating the currency and accuracy of AI outputs before reliance.

2.6 Bias

AI systems may reflect biases present in underlying training data. The Client is responsible for monitoring outputs for bias, particularly in contexts involving personnel decisions, customer-facing communications, or assessments of individuals.

3. Human Oversight Obligation

The Client accepts sole responsibility for implementing and maintaining appropriate human oversight of all AI systems deployed through the Services, proportionate to the risk profile of the deployment context. Applegate AI strongly recommends, and in certain contractual contexts requires, human review of AI outputs prior to any action being taken on the basis of those outputs, particularly where outputs may materially affect individuals or expose the Client to regulatory risk.

4. Exclusion of Liability for AI Outputs

4.1

Applegate AI shall not be liable for any loss, damage, cost, claim, or liability of any nature arising from the Client’s or any end user’s reliance on AI-generated outputs without adequate human review and validation.

4.2

Applegate AI shall not be liable for any regulatory sanction, fine, enforcement action, reputational damage, or third-party claim arising from the Client’s deployment of an AI system in a regulated context without appropriate authorisation, disclosure, or oversight.

4.3

Applegate AI shall not be liable for any harm arising from AI-generated outputs that were not reasonably foreseeable at the time of system design and testing, including outputs produced in response to adversarial, unusual, or unanticipated user inputs.

4.4

These exclusions do not exclude liability for death, personal injury caused by negligence, or fraud.

5. Third-Party AI Infrastructure

Applegate AI’s services are built in part on third-party AI infrastructure. Applegate AI does not control and accepts no liability for changes to third-party model behaviour or output; third-party platform outages, rate limiting, or deprecation; or changes to third-party pricing or terms of service. The Client acknowledges that AI models may be updated by third-party providers at any time, which may result in changes to output behaviour without notice.

6. Client Disclosure Obligations

Where AI-powered systems are deployed to interact with the Client’s customers or the public, the Client is solely responsible for providing appropriate disclosure that users are interacting with an AI system where required by law or regulation; offering escalation to a human agent where appropriate; and complying with all applicable consumer protection, data protection, and sector-specific regulatory requirements.

7. Ongoing Monitoring

Applegate AI recommends that clients regularly review AI interaction logs, establish processes for identifying edge cases and inappropriate outputs, and report significant or recurring issues to Applegate AI as part of the ongoing retainer relationship.

8. Acceptance

Engagement of Applegate AI under a Master Services Agreement constitutes the Client’s confirmation that it has read, understood, and accepted this AI Disclaimer in full, and that it will communicate appropriate disclosures to end users of all deployed systems.