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Buying an LLM API: the contract terms most worth watching
Calling a third-party model doesn't outsource the risk — users see your product, and responsibility lands on you first.
More products call third-party LLMs via API. That doesn't transfer the risk: user-facing transparency, use-case compliance, and content responsibility remain yours, and the contract is the tool to allocate risk in advance.
The terms most worth settling: whether the vendor retrains on your input and for how long it's retained; ownership of output and the scope and cap of infringement indemnity; notice duties on model deprecation or upgrades; and the duty to provide compliance and audit materials.
The pragmatic approach is a set of standard terms and negotiation floors so business and legal work efficiently within one framework, with written support for key obligations.