Sensationalistic claims about the potential of Artificial Intelligence (“AI”) and “smart” or “algorithmic” contracts suggest that technological progress renders traditional legal principles obsolete or, at least, inadequate. Seemingly, technological change must lead to legal change. Opposing such uninformed generalisations, this presentation explores how contract law can deal with contract formation and contract performance where one or both parties deploy sophisticated computer programs. It addresses the purported absence of human intention in the transacting process and clarifies the legal implications, if any, of automating various aspects of contracting, by asking:

– Are the old cases on vending machines still applicable to trading algorithms?
-Can we stretch the objective theory of contract so far as to encompass autonomous systems?
-Is there a point where the degree of transaction automation renders it impossible to speak of human participation and hence intention?
-Should there be a difference depending on whether we are automating physical or cognitive tasks?

In addressing these questions, the point of departure are the fundamental legal principles that contractual intention can be communicated in any manner and that it is evaluated objectively. Although AI can optimise many aspects of commercial activity, it will be argued that there is no need to abandon long-established contract law principles “just because” computers operate faster than a human brain or because they can process more transaction parameters than a human trader. 

About the Speaker:

Dr. Eliza Mik joined the Faculty of Law in January 2021. Prior to that she was researching and teaching at the Singapore Management University, Bocconi University and at Melbourne Law School. Before joining academia, she worked in-house for a number of software and telecommunications companies in Australia, Poland, Malaysia and the United Arab Emirates. She advised on technology procurement and e-commerce regulation. Her PhD focused on the private law aspects of e-commerce and on the legal problems of transaction automation. Since 2014, she has been actively researching smart contracts and blockchains. Eliza has advised the World Bank and the Monetary Authority of Singapore. At present, she is a member of the UNCITRAL Expert Group for the Digital Economy, a member of the Inclusive Global Legal Innovation Platform on ODR, a Research Associate at the Tilburg Institute for Law, Society and Technology and an Affiliate Researcher with the Centre for AI and Digital Ethics at the University of Melbourne.

The Hong Kong Law Society has awarded this seminar 1 Continuing Professional Development (CPD) point.