Agentic AI refers to systems capable of independently making decisions, initiating actions and interacting with digital or physical environments with minimal human oversight. Such tools may unlock efficiency and scale—but also amplify legal risk. 

AI Agents can potentially perform tasks such as entering contracts, conducting transactions, altering data, or communicating with customers. Their autonomy means that traditional risk controls—like human review—may no longer catch errors before harm occurs. This alone should be a great big red flag to any business owner, as we will discuss in this article.

Key Legal Risks for Australian Organisations

Australian businesses should be aware of and understand that using agentic AI does come with risks. Ultimately, each business will have its own risk tolerance. However, taking on risk and simply claiming later that it was not known is not a get-out-of-jail-free card and won't save you when things go south.

So what are the risks? Let's dive in!

1. Liability Under Agency Law

Do an AI agent’s actions legally bind the organisation?

• If an AI system is deployed with authority—explicit or implied—its actions may be treated as those of a human agent.
• Even if the AI exceeds its intended authority, a business may still be bound under the doctrine of apparent authority if third parties reasonably believe the AI was authorised. 

This creates significant exposure where AI interacts directly with customers or external platforms.

2. Consumer Protection Risks

If an AI agent provides misleading information, makes unauthorised commitments, or engages in conduct that could be considered unfair or deceptive, the organisation may face liability under the Australian Consumer Law. This risk is heightened when AI autonomously generates representations or negotiates transactions.

3. Privacy and Data Governance Obligations

Agentic AI often requires broad access to data and tools, increasing the likelihood of:

• unauthorised data exfiltration
• accidental disclosure
• data alteration or destruction 

With major reforms to the Privacy Act expected to commence in 2026, organisations must ensure transparency, purpose and use limitations, as well as thorough oversight of autonomous data handling.

4. Contractual and Platform Compliance Issues

Many agentic systems interact with third-party platforms. If those platforms prohibit automated access or transactions, organisations may inadvertently breach terms of use. 

Additionally, off-the-shelf agentic AI tools are governed by supplier terms that may limit liability or shift risk back to the customer, meaning you!

5. Negligence and Duty of Care

Where agentic AI causes foreseeable harm—financial, operational, or physical—organisations may face negligence claims for failing to implement adequate safeguards, testing, monitoring or human-in-the-loop controls.

So what can be done to minimise these risks? The following gives some examples of risk mitigation strategies

• Clearly specify what the AI agent can and cannot do.
• Use access controls, approval workflows and monitoring systems.
• Ensure AI interactions comply with third-party requirements.
• Limit data access and maintain audit trails.
• Ensure staff understand the capabilities and limits of agentic AI.

Final Thoughts

Agentic AI offers transformative potential, but its autonomy introduces legal uncertainty that businesses cannot ignore. Australian organisations should approach deployment with a clear governance framework, rigorous oversight and an understanding that they may ultimately be responsible for the acts and missteps of their digital agents.

As agentic AI becomes more deeply embedded in business operations, the legal landscape will only grow more complex. Organisations that act early, by clarifying authority structures, strengthening governance, and reviewing their exposure, will be best positioned to innovate safely.

If your business is exploring or already deploying agentic AI, RossiLaw Solicitors can help you navigate the emerging regulatory and liability risks with clarity and confidence. Our team advises on governance frameworks, contractual protections, compliance obligations and practical safeguards tailored to your operational environment.

To discuss how to future‑proof your organisation and reduce your AI‑related legal risk, contact RossiLaw Solicitors for a confidential consultation!