What to Ask an AI Agency Before You Sign

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The questions to ask an AI agency have almost nothing to do with models. Seven of them separate suppliers, because they are about documentation, about who answers to the regulator, and about what stays in your house when the contract ends.

The reason is legal. Since 2 August 2026 the AI Act transparency obligations and the supervisory powers of national authorities have applied. Whoever answers to the supervisor is, as a rule, whoever places the system on the market or uses it. Not the agency that built it.

Regulation (EU) 2024/1689 was amended by Regulation (EU) 2026/1744, which entered into force on 27 July 2026. The high-risk obligations for standalone Annex III systems moved to 2 December 2027, and those for AI embedded in Annex I products to 2 August 2028. The Article 50 obligations were not deferred.

2 Aug 2026
Article 50 applies. National supervisory powers in force
2 Dec 2026
Article 50(2) reaches systems already on the market
2 Dec 2027
Annex III high-risk obligations
2 Aug 2028
Annex I, AI embedded in regulated products
An agency can deliver a system that works very well and leave it with nothing that answers a supervisor. That is not bad faith, it is scope. If you did not ask for the documentation, nobody built it.

Who answers to the regulator, you or the agency?

As a rule, you. And this is the question that changes all the others, which is why it is worth settling before discussing scope or price.

The AI Act distributes obligations by role. The provider is whoever develops and places on the market under their own name or trademark. The deployer is whoever uses the system under their own authority. An agency that builds a system for you, which is then used under your brand, places it in your sphere of responsibility rather than its own.

Article 25 addresses precisely the situations where the role changes hands, such as putting your name or trademark on a system, substantially modifying it, or changing its intended purpose. Regulation (EU) 2026/1744 added selected Article 25 duties to the middle penalty tier, which is a signal that the question of roles has stopped being academic.

The three penalty tiers in Article 99
35M or 7%
Prohibited practices under Article 5. The higher of the two figures
›
15M or 3%
Other operator obligations, including the Article 50 duties
›
7.5M or 1%
Incorrect, incomplete or misleading information to authorities
For large companies the higher of the two figures applies. For SMEs and start-ups, Article 99(6) reverses the rule and the lower one applies. For most readers, that is the most relevant line in the regulation.

The seven questions to ask an AI agency

Each one produces measurably different answers between suppliers. We include the answer that should make you uncomfortable.

Who is the provider and who is the deployer, in the AI Act sense? Good answer: the distinction explained and assumed in the contract. Poor answer: "that is a legal question" or "we have not looked at that yet".
What technical documentation do you deliver, and when? Good answer: a specific list, produced during the project. Poor answer: "we document at the end" or "we have the notebooks".
Where does the training or context data come from, and how is that recorded? Good answer: documented provenance with the legal basis identified per source. Poor answer: "we used what was available".
Where does inference run, and what is retained? Good answer: location, retention of prompts and outputs, and who has access, in writing. Where data residency is the binding constraint, on-premise deployment is usually the honest answer. Poor answer: a generic response about encryption.
How do you evaluate whether the system works, and who can access that evaluation? Good answer: an evaluation set, criteria defined in advance, and results you can run yourself. This is the same evidence problem we describe in software quality evidence. Poor answer: "we tested it" with no artefact left with you.
Where does a human decide, and what happens when the system fails? Good answer: oversight points designed into the application, with defined failure behaviour. Poor answer: oversight described as "the user can always check".
What stays with us if we change supplier? Good answer: code, infrastructure definitions, evaluation set and documentation, all transferable. Poor answer: the agency platform, with no exit. It is the most avoided question and it is legitimate to insist.
Evaluating AI suppliers? Ask us the seven questions in the same order.
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Which artefacts should you require on delivery?

Four. What unites them is that none can be produced afterwards, which makes them contract clauses rather than requests at the end of a project.

Artefact 1
Technical documentation
The record of design decisions, alternatives considered and the reasons. It is a record of what happened while it was happening. Reconstructed six months later, it is well-intentioned fiction.
Artefact 2
Data governance and provenance
Which data, from where, on what legal basis, with what processing. Unrecoverable once nobody remembers the source, and people change jobs.
Artefact 3
Human oversight design
Where a person decides, what they see at that moment, what they can change. It is interface and flow design. Adding it later means rebuilding.
Artefact 4
Logs and traceability
Which decision was taken, on which input, along which path. It has to be in the architecture. There is no way to generate logs retroactively that were never written.
A quick test for any proposal you are holding. Search for four words: documentation, provenance, oversight, logs. If none appears, the budget does not cover them, and you will pay for them twice.

What changes on 2 December 2026?

Article 50(2) reaches systems already in production. It is the nearest date and the least discussed. Article 50 requires AI-generated content to be marked in a machine-readable format so it can be detected as artificially generated. It applied to new systems from 2 August 2026. Systems already on the market at that date have until 2 December 2026.

Three questions to ask the agency, if anything in your product generates content. How many paths in the product produce generated output, knowing the honest answer is usually more than the initial list. Is the marking applied at generation or at presentation, knowing that marking at the presentation layer disappears when content leaves your interface. And if the model is third-party, do they mark, and do you inherit it, a question for now rather than for November.

And a note of honesty worth demanding. The robustness of marking has known limits: re-encoding, cropping and format conversion degrade or remove many marks. An agency guaranteeing unremovable marking is promising what it cannot deliver, and that is more concerning than admitting the limit. We covered what actually changed in the AI Act in August 2026 separately, and our Claude Partner Network note covers how we build against model-provider guidance rather than reverse-engineering it.

Which clauses are missing from most AI contracts?

Six, and none is exotic. They are missing because the contracts were drafted before the obligations existed. Delivery of the four artefacts as a condition of acceptance rather than a desirable annex. Explicit allocation of the provider and deployer roles. Inference location and a retention policy for prompts and outputs. A right to run the evaluation set independently. An obligation to notify changes to the model or the underlying model provider. And an orderly exit, covering what is delivered, in what format and within what deadline.

The fifth is the least obvious and the most useful. If the agency swaps the underlying model without telling you, your system behaviour changes and your documentation stops describing what is in production. That is your problem, not theirs, and it may amount to a substantial modification in the Article 25 sense.

Which signals suggest the project will not reach production?

None of these is disqualifying. All are worth a second question before signing. The proposal describes model capabilities rather than the business problem. There is no written success criterion, which means nobody can say the project failed and it lives indefinitely in pilot. Nothing describes what happens when the system gets it wrong, despite AI systems erring by design. The demonstration is flawless and there is no evaluation environment, which is the difference between a sample they chose and one you chose. Nobody asks for your real data, despite that being where the surprises live. And the word pilot appears without an exit condition.

Frequently asked questions

Responsibility and penalties

Who answers to the regulator, the company or the AI agency?
As a rule, whoever places the system on the market under their own name or uses it under their own authority. The AI Act distributes obligations by role, the provider being whoever develops and places on the market and the deployer whoever uses the system. Article 25 addresses the situations where the role changes hands, including putting your name on a system or changing its intended purpose.
What are the AI Act penalties?
Article 99 sets three tiers. Up to 35 million euros or 7% of worldwide annual turnover for the prohibited practices in Article 5. Up to 15 million or 3% for non-compliance with other operator obligations, including the Article 50 duties. Up to 7.5 million or 1% for supplying incorrect, incomplete or misleading information. For large companies the higher figure applies. For SMEs and start-ups, the lower one.

AI Act deadlines

What changes on 2 December 2026?
Article 50(2), which requires AI-generated content to be marked in a machine-readable format, reaches systems that were already on the market on 2 August 2026. New systems have been in scope since that date. It is the nearest obligation and the least discussed.
Was the AI Act delayed?
Partly. Regulation (EU) 2026/1744 entered into force on 27 July 2026 and deferred the high-risk obligations for Annex III systems to 2 December 2027 and those for Annex I to 2 August 2028. The Article 50 transparency obligations were not deferred and have applied since 2 August 2026.

Questions to ask an AI agency about documentation and exit

What documentation should you require from an AI agency?
Four artefacts, all as a condition of acceptance rather than an annex. Technical documentation of design decisions, data governance and provenance, human oversight design, and logs with traceability of decisions. None can be produced after the project, which makes them contractual matters.
What should stay with us if we change AI supplier?
Code, infrastructure definitions, the evaluation set, technical documentation and data provenance records, in transferable formats and within a defined deadline. If the answer to this question is the agency platform with no exit, you are buying a dependency rather than a system.
Caixa Mágica Software
Caixa Mágica Team
Caixa Mágica Software is a Portuguese software company with 20+ years of experience delivering custom software, AI solutions and nearshore development teams for European businesses.
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