Much of legal scholarship seems to have been overwhelmed by sensationalistic descriptions of the raise of Artificial Intelligence (“AI”) and the accompanying extolments of ‘smart,’ ‘algorithmic’ or ‘computable’ contracts. Many have surrendered to the popular view that technological progress renders existing legal principles obsolete or, at least, inadequate. Purportedly, technological change must lead to legal change and new technology must lead to new legal principles. Opposing such pointless generalizations and absurd neologisms, this presentation confronts a number of popular theories surrounding the process of contract formation where one or both parties rely on sophisticated computer programs. Abstracting from futuristic visions of “intelligent machines overtaking the world,” it addresses the purported absence of human intention in the transacting process and examines the legal implications, if any, of interposing one or two AIs between the contracting parties. The point of departure are the fundamental legal principles that contractual intention can be communicated in any manner and that such intention is evaluated from the perspective of the reasonable addressee. Unquestionably, AI can optimize human performance in the contracting process. We must not, however, depart from long-established legal principles just because a computer operates faster than a human brain or because it can process more transaction parameters than the average human trader. Given the increase in computing power, are the old cases on vending machines still applicable? Can the objective theory of contract be stretched so far as to encompass autonomous systems and trading algorithms? Is there a point where the degree of 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 or is the entire debate around automated contracts a waste of precious academic time?
For full paper see: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4485764
About the Speaker: Dr. Eliza Mik, Assistant Professor, CUHK LAW
Register here by 12noon, 24 October 2023 to attend the seminar.