The Swiss Code of Obligations (CO) has been the legal foundation for contracts in Switzerland for over a century. Today, AI tools - as used on platforms like CASUS - are changing how contract law is applied in practice. What the CO actually requires, where AI can help, and where human judgment remains indispensable are questions that matter equally to law firms and in-house legal teams.
This article goes beyond a general overview. It describes concrete patterns from Swiss contract work, names the relevant statutory provisions, and shows which clause types AI can reliably handle - and which it cannot.
The CO as the basis of Swiss contract law
The Code of Obligations governs the formation, content, and termination of contractual relationships in Switzerland. Most of it applies as default law: the parties can agree to deviating rules. Where a contract is silent, the CO steps in as a statutory fallback.
That has significant practical consequences. If a construction contract contains no provision on defect notification, CO Art. 367 ff. applies. If a sales contract is silent on warranty, CO Art. 197 ff. takes effect. For contract interpretation - when the wording of a clause is disputed - CO Art. 18 is the reference point: it makes the actual common intent of the parties the decisive factor, not merely the literal text. The Federal Supreme Court confirmed in BGE 144 III 93 that normative interpretation based on the principle of good faith only applies where an actual common intent of the parties cannot be established.
Leaving out a clause means accepting the statutory default. Sometimes that is deliberate; often it is an oversight. This is one of the clearest areas where AI adds value in contract work: identifying gaps before they become problems.
Where AI fits into Swiss contract law practice
AI-assisted contract analysis is not a substitute for legal expertise. It is a tool that handles certain tasks faster and more systematically than a person working alone.
Identifying gaps and deviations
A common problem in contract work: a contract includes a liability clause but no liability cap. Or there is no provision for data protection responsibility. Finding these gaps manually takes time and requires good recall of standard requirements.
CASUS addresses this with the Benchmark workflow. It checks a document against an internal playbook or established industry standards - for SPA, NDA, or DPA contracts, for example. The system shows which clauses are missing, incomplete, or deviating from the standard, and provides a concrete suggestion for each finding, including the option to insert a suitable clause directly at the right place in the Word document. The benchmark output also includes a percentage match score against the reference standard.
A concrete pattern observed in Swiss NDA reviews: liability limitations are frequently missing entirely, while the confidentiality obligation itself is usually present but formulated without a deletion duty after contract expiry. In Swiss M&A SPAs, the clause most often flagged as missing or incomplete is not the liability cap - it is the MAC definition (Material Adverse Change). This concept is standard in international transactions but often absent from Swiss-law SPA templates entirely.
Structured risk prioritisation
A contract with twenty findings is hard to work through without a clear sense of what to address first. The CASUS Risk & Quality Review assigns each finding to a party and prioritises by severity: low, medium, or high. This makes it possible to identify negotiation potential quickly and manage work in a targeted way.
In beta testing with Swiss law firms, the median time for an initial review of a 20-page SPA draft dropped from approximately 94 minutes to 23 minutes, measured across a structured comparison at six participating firms. This is not a promise for every use case, but it illustrates where the value lies: not in replacing legal work, but in accelerating the first pass.
Checking consistency and language
Long contracts are prone to subtle errors: a term is capitalised inconsistently; a cross-reference points to a section that does not exist; a placeholder was overlooked. The CASUS Proofread function checks spelling, grammar, terminology consistency, and structural elements such as numbering, cross-references, and annexes - without altering the legal meaning of any clause. Swiss spelling conventions (ss instead of ss, consistent party names) are applied throughout.
The regulatory framework: AI and law in Switzerland
Switzerland currently has no specific AI legislation. On 12 February 2025, the Federal Council mandated the Federal Department of Justice and Police (FDJP) to prepare a consultation draft for AI regulation by the end of 2026. Planned areas of regulation include transparency, data protection, non-discrimination, and oversight. The FDJP confirmed this mandate as part of its ongoing regulatory work; the draft is scheduled to enter consultation during 2026.
In parallel, the Swiss Bar Association (SAV/FSA) stated in its 2024 position on digitalisation in legal practice that AI tools are compatible with professional duty-of-care obligations, provided quality control remains with the human professional and client data is not passed to third-party providers without control. This position is directly relevant for law firms considering AI adoption.
What the revised FADP specifically requires
The revised Swiss Federal Act on Data Protection (revDSG/nFADP), in force since 1 September 2023, is relevant to AI use in contract work in several respects. Art. 6 revDSG codifies the principles governing data processing: lawfulness, good faith, proportionality, and purpose limitation. Anyone feeding contract data containing personal data into an AI system must ensure that processing meets the principles of Art. 6 revDSG.
Art. 5 lit. c revDSG defines sensitive personal data, including health data, biometric data, and data on administrative or criminal proceedings. These categories appear in contracts regularly - in HR agreements, M&A documents, and medical practice transfer agreements. Elevated data security requirements apply.
For international contracts with EU exposure, GDPR Art. 28 applies to data processor arrangements. A DPA without the required processor clauses is not just incomplete - in EU contract relationships it is non-compliant.
CASUS hosts data exclusively in Switzerland and the EU, transfers no data to the US, and retains no user data after a session (Zero Data Retention). There is no manual access by third parties (No Human Review). This directly meets the requirements of Art. 6 revDSG and makes use in client mandate contexts considerably more straightforward.
AI-assisted legal research on CO questions
Beyond contract analysis, AI can support legal research on CO-related questions. The CASUS Legal Research module provides access to over 660,000 cantonal and federal court decisions as well as statutory law. Relevant reasoning sections from decisions are displayed directly within answers - no need to navigate to the original source.
This enables structured first assessments on questions such as: How does case law treat limitation-of-liability clauses in general terms? What are the requirements for extraordinary termination under CO Art. 337? Under the established case law of the Federal Supreme Court, an important reason within the meaning of CO Art. 337 exists when, in good faith, the terminating party can no longer be expected to continue the employment relationship. Such leading decisions can be retrieved directly in Legal Research mode and used as the basis for clause drafting.
The outputs are source-based and traceable - not generated answers without legal grounding. They can be used directly in further work: as a rationale for a clause, as an internal memo, or as the basis for changes via Agent Mode in the chat.
Key CO clauses: what AI can reliably spot - and what it cannot
Not all clause types are equally suited to automated review. The table below distinguishes between default and mandatory CO provisions and shows where AI is reliable and where human judgment is essential.
Clause type | CO basis | Mandatory / default | AI reliability |
|---|---|---|---|
Exclusion of liability for intent/gross negligence | Art. 100/101 CO | Mandatory (para. 1) | High: clause can be checked for violation |
Liability cap | Art. 100 CO (by analogy) | Default | High: absence reliably flagged |
Ordinary termination (tenancy) | Art. 266 ff. CO | Partly mandatory | Medium: notice periods checkable, cantonal conciliation specifics not |
Extraordinary termination | Art. 337 CO | Default (employment: partly mandatory) | Medium: prerequisites identifiable, individual assessment not |
Warranty in sales contracts | Art. 197 ff. CO | Default (partly mandatory vis-a-vis consumers) | High: missing notice periods and exclusions are recognised |
MAC definition (M&A) | No specific CO basis | Individually drafted | Low: absence can be flagged, drafting remains the lawyer's task |
Data protection responsibility (DPA) | Art. 6 revDSG, GDPR Art. 28 | Mandatory (for processor arrangements) | High: presence and completeness checkable |
Contract interpretation clause | Art. 18 CO | Default | Low: interpretation questions require individual assessment |
This distinction has practical consequences. For mandatory provisions, AI can reliably check compliance - a clause that violates CO Art. 100 para. 1 is void regardless of what the parties agreed. For highly individualised clauses such as MAC definitions or governing-law/interpretation rules, the quality of AI analysis depends directly on the quality of the playbook behind it.
Limits of AI in contract law
AI tools are well suited to recognising structured patterns, comparing clauses against standards, and checking formal consistency. For complex transactions, they hit specific limits that are worth naming precisely.
First: without a clear playbook or defined minimum positions, AI produces a list of findings without any ability to assess which of them are genuinely critical to the negotiation. A missing liability cap in a supply contract worth CHF 50,000 is a different risk from the same gap in an SPA worth CHF 50 million. That contextualisation is the lawyer's job.
Second: in heavily negotiated bespoke contracts - for example, joint ventures between two groups each with their own legal team - the contract document often captures only part of the commercial understanding. Side letters, oral agreements, and industry practice are absent from the text but very much present in reality. AI sees only the document.
Third: cantonal specifics are frequently underestimated by AI systems. Tenancy law with cantonal conciliation authority procedures, property transfer taxes in cantons such as Bern or Geneva, differences in cantonal procedural law for debt enforcement proceedings - these dimensions are invisible in the contract text but central to the legal assessment.
A frequently underestimated issue observed in NDA reviews: the clause requiring the return or destruction of confidential information after contract expiry is missing from a significant share of Swiss NDAs reviewed. Without it, it is unclear how Art. 6 revDSG (proportionality of data processing) can be satisfied after the contract ends. AI can reliably flag this absence. Whether to require a written destruction confirmation is a judgment call for the lawyer.
Decision frame: when AI adds value in Swiss contract work
The following breakdown helps assess where AI-assisted contract analysis delivers clear value and where preparation is needed first.
AI delivers high value when:
The document corresponds to a known contract type (NDA, SPA, DPA, construction contract) and a playbook is in place
The goal is identifying gaps, not assessing negotiation positions
Multiple documents need to be reviewed in parallel (due diligence situations)
Formal consistency, cross-references, and terminology need to be checked
Legal research on a specific CO question needs to be structured quickly
AI needs preparation when:
The contract type is highly individualised and no reference standard exists
The commercial logic of the deal is not captured in the document
Cantonal specifics (conciliation, stamp duties, procedural law) are relevant
AI cannot replace:
The weighing of legal risk against commercial pragmatism
The judgment of what is critical to negotiate versus what is acceptable
Information outside the document (side letters, oral agreements, industry practice)
CASUS for everyday contract work under Swiss law
Legal teams working with Swiss contracts who want a structured approach to AI can use CASUS directly in Microsoft Word or via the web app. The platform covers the full document lifecycle: from Benchmark comparison against an internal playbook, through Risk & Quality Review, to Proofread before sending.
For due diligence situations, the AI Data Room is available to analyse dozens or hundreds of documents in parallel and extract clauses - on liability, IP, termination, or any defined topic - into a structured table.
CASUS can be tested free of charge at app.getcasus.com/signup. Further details on data protection and hosting are available at /security. An overview of all modules is at /product.
FAQ
What does the Swiss CO govern in contract law?
The Code of Obligations (CO) governs the formation, content, and termination of contractual obligations in Switzerland. Most of it applies as default law, meaning parties can agree to deviating rules. Where a contract is silent, the statutory CO provision applies as a fallback. Contract interpretation follows CO Art. 18, which makes the actual common intent of the parties the primary reference.
Can AI apply Swiss contract law independently?
AI tools can identify clauses, compare them against standards, and flag gaps. The legal assessment of whether a clause is appropriate in a given situation - and what negotiation strategy makes sense - remains the responsibility of qualified lawyers. For mandatory CO provisions, such as the prohibition on excluding liability for intentional acts under CO Art. 100 para. 1, AI can check compliance. For highly individualised clauses, the quality of the analysis depends directly on the playbook in place.
Is using AI in Swiss contract work legally permitted?
Switzerland has no specific AI law. The Federal Council mandated the FDJP on 12 February 2025 to prepare a consultation draft by end of 2026. Until then: AI use is permitted, provided professional duty-of-care obligations are met. Lawyers remain responsible for the quality of their work product. The SAV/FSA stated in 2024 that AI tools are compatible with professional obligations, provided quality control remains with the human professional.
Which CO clauses are most relevant for AI analysis?
The clauses most commonly reviewed are liability provisions (CO Art. 100/101), termination rules (CO Art. 266 ff., Art. 337), warranty provisions (CO Art. 197 ff.), and data protection clauses in the context of revDSG Art. 6 and GDPR Art. 28. In Swiss NDAs, the post-expiry deletion clause is most frequently missing. In M&A SPAs, the MAC definition is the most commonly absent clause.
What does the revDSG specifically require for AI use?
Art. 6 revDSG requires that personal data be processed lawfully, in good faith, and proportionately. Anyone feeding contract data containing personal data into an AI system must meet these principles. Art. 5 lit. c revDSG defines sensitive personal data - including health data and biometric data - which triggers elevated protection requirements. For contracts with EU exposure, GDPR Art. 28 governs data processor arrangements.
How does contract analysis differ from contract management?
Contract analysis covers the substantive review of a document: risk assessment, clause identification, and recommendations. Contract management covers the administration of contracts over their lifecycle - deadlines, renewals, filing, and reporting. CASUS primarily supports the analysis and review phases, not lifecycle-based contract management.
How does CASUS protect data when using AI?
CASUS hosts data exclusively in Switzerland and the EU, transfers no data to the US, retains no user data after a session (Zero Data Retention), and allows no manual access by third parties (No Human Review). This meets the requirements of revDSG Art. 6 (proportionality and purpose limitation) and makes use in client mandate contexts considerably more straightforward.
What is the difference between a benchmark and a risk review?
A benchmark checks whether a contract meets a defined standard - for example, whether all standard clauses are present and complete - and outputs a percentage match score. A risk review analyses the specific risks and weaknesses of a particular document from the perspective of one contracting party, prioritises by severity, and provides concrete drafting options.
Can AI help with research on CO questions?
Yes. The CASUS Legal Research module provides access to over 660,000 cantonal and federal court decisions as well as statutory texts. Relevant reasoning sections are displayed directly in the chat. For example, the Federal Supreme Court's case law on the requirements for extraordinary termination under CO Art. 337 can be retrieved quickly and used as the basis for clause drafting. Results are source-based, structured, and directly usable in further work.
