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Intelligent agents and contracts: Is a conceptual rethink imperative?

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Abstract

The emergence of intelligent software agents that operate autonomously with little or no human intervention has generated many doctrinal questions at a conceptual level and has challenged the traditional rules of contract especially those relating to the intention as an essential requirement of any contract conclusion. In this paper, we will try to explore some of these challenges, and shed light on the conflict between the traditional contract theory and the transactional practice in the case of using intelligent software agents. We will try further to examine how intelligent software agents differ from other software applications, and consider then how such differences are legally relevant. This paper, however, is not intended to provide the final answer to all questions and challenges in this regard, but to identify the main components, and provide perspectives on how to deal with such issue.

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Notes

  1. See Thornton v Shoe Lane Parking [1971] 2QB 169.

  2. Tom Allen, Robin Widdison, Can computers make contracts?, 9 Harv. J.L. & Tech. 25, 1996, p. 48.

  3. G. Finocchiaro, The conclusion of the electronic contract through “software agents” A false legal problem? Brief consideration, Computer Law & security Report, Vol. 19, no.1, 2003, p. 22.

  4. The second generation of intelligent software agents is even able to submit a bid in an auction, which requires some form of evaluation and judgment as to the optimal price to be bid. Electronic auction systems nowadays are structured to interact with intelligent agent systems. A good example here is the worldwide E-Bay system. Examples can also be found at yahoo.com, where a bidding agent place bids on the user’s behalf at the lowest possible increments. See as well AuctionBot.com, bidxs.com, rubylane.com, auctionwatch.com, and bidfind.com. For further details, see Turban et al., Electronic Commerce: A managerial Perspective, Pearson Prentice Hall, 2004, Ch.11.

  5. For example, the MIT group has developed Tete-a-Tete (T@T) a program that enables electronic agents to negotiate not only price, but several other terms of a transaction, including warranties, shipping, service, returns, and payment options. For more information, see http://ecommerce.media.mit.edu/tete-a-tete/

  6. See for example http://www.mysimon.com, http://kasbah.media.mit.edu. Contemplate also the role of intelligent agents, called electronic liquidity finders’ (ELFs), in the area of electronic stock trading. Such agents are used widely to find counterpart to a stock trade, and to negotiate and execute the trade on the user’s behalf.

  7. Such debate has been discussed by many authors. See, for example, Tom Allen, Robin Widdison, Can computers make contracts?, 9 Harv. J.L. & Tech. 25, 1996, p. 32. See also Brian Subirana, Malcolm Bain, Legal Programming: Designing Legally Compliant Rfid and Software Agent Architectures for Retail Processes and Beyond, Springer, 2005, Ch.2, pp. 75–76.

  8. Margaret J. Radin, et al, Internet Commerce: The Emerging Legal Framework, Foundation Press, New York, 2002, p. 357.

  9. Lawrence B. Solum, Legal personhood for artificial intelligences, 70 N.C. L. Rev. 1992, p. 1275.

  10. John Searle is a very well known author in the philosophy of mind and cognitive science. He is very well known for his development of a thought experiment, called the “Chinese room” argument. In his theories, Searle has tried to prove that human thought was not simply computation, and that a computational process in itself does not have the ability to understand intellectual events and processes.

  11. For more information, see J.Searle, Minds, brains, and programs, Behavioral and Brain Sciences, 1980; see also for the same author Rationality in Action, The MIT Press, 2003.

  12. Johnson-Laird, The Computer and the Mind, 2nd Ed, Fontana Press, London. 1993, p. 353.

  13. Lawrence B. Solum, op. cit., p. 1248.

  14. J. Searle, Minds, brains, and programs, Behavioral and Brain Sciences, 1980. Passim.

  15. This implies that an intelligent system does not need to mimic the biological or mental one in order to be intelligent, or intentional unless and until the science shows that intentionality is definitely some kind of thing unique to the brains of the organisms. See P. Resnick, Intentionality is Phlogiston, Thinking Computer & Virtual Persons, E. Dietrich, Academic Press, 1994, p. 44.

  16. John Finnis, Intention in Tort Law, Philosophical Foundations of Tort Law, David Owen, Clarendon Press. Oxford, 1995. p. 229.

  17. E. Allan Farnsworth, Contracts, 3rd Ed, Aspen Law & Business, 1999, p. 116.

  18. As far back as 1478 Chief Justice Brian had said that ‘the intent of man cannot be tried, for the Devil himself knows not the intent of man’, Anon (1477) YB 17 Edw 4, fo 1, p. 2, quoted in Cheshire, Fifoot and Furmston’s Law of Contract, 13th Ed, Butterworths, 1996, p. 29.

  19. Such question has been asked by some authors such as Tom Allen, Robin Widdison, op. cit., p. 32, Brian Subirana, Malcolm Bain, op. cit., p. 75.

  20. Emily M. Weitzenboeck, op. cit., p. 221.

  21. Let us also contemplate cases where the software agent installed automatically without the knowledge of the user who was forced by an online company to use their electronic agent at the moment he wanted to download a book or song from their Web site.

  22. Juliet M. Moringiello, Signals, Assent and Internet Contracting, Rutgers Law Review, Vol. 57:4, 2005,p. 1310.

  23. See Kennedy v. Lee [1817] 3 Mer 441.

  24. See Storer v Manchester City Council [1974] 3 All ER 824, in which Lord Denning stated, “In contracts you do not look into the actual intent in a man’s mind. You look at what he said and did. A contract is formed when there is, to all outward appearances, a contract. A man cannot get out of a contract by saying: ‘I did not intend to contract’ if by his words he has done so. His intention is to be found only in the outward expression....”

  25. The same conclusion was reached by Brian Subirana, Malcolm Bain, op. cit., pp. 75–76.

  26. For more information, see P.-A. Foriers, L’apparence, source autonome d’obligations, ou application du principe général de l’exécution de bonne foi. A propos de l’arrêt de la Cour de cassation du 20 juin 1988, Journal des Tribunaux (J.T.), 1989, p. 543.

  27. For an excellent discussion of this view that deals with the theory of the appearance as a suggested solution in the case of contracts concluded automatically through electronic agents, see Yves Poullet, Conclude a Contract Through Electronic Agents?, in Electronic Commerce- DER Abschlub von Verträgen im Internet, 2001, 65–84.

  28. See L’Estrange v Graucob [1934] 2 KB 394 at 403 per Scrutton LJ, when the court ruled that a person who signs a contract without reading it is normally bound by its terms.

  29. Atiyah, P., Essays on Contract, Clarendon Press, Oxford, 1986, Ch.2, p. 22.

  30. See Giovanni Sartor, Cognitive automata and the law, Published also in Jon Bing and Giovanni Sartor (Eds). The Law of Electronic Agents, 67–114, Oslo, 2003, p. 38, as available at www.cs.uu.nl/jurix03/sartorpaper.pdf, on 30/1/06.

  31. Let us contemplate the widely famous case of State Farm Mutual Automobile Insurance Co v Bockhurst 453 F.2d 533 (10th Cir. 1972), in which the insurance company was bound by its computer’s notice notwithstanding the bad faith of the motorist who contacted with the company after an accident occurred. Such decision could be different if due attention given to the bad faith of the motorist which would make his reliability unreasonable, or if the case was looked at by a subjective judge who believe in the real will and the inner state of mind.

  32. This is even truer if we contemplate that prices online might be cheaper sometimes to attract customers such as in the cases of sales, special offers, and auctions.

  33. Emily M. Weitzenboeck, op. cit., p. 222.

  34. Ian R Kerr, Spirits in the Material World: Intelligent Agents as Intermediaries in Electronic Commerce, The Dalhousie Law Journal, Vol. 22. Number2. Fall 1999. p. 214.

  35. Jean-Francois Lerouge, The use of electronic agents questioned under contractual law: Suggested solutions on a European and American level, 18 J. Marshall J. Computer & Info.L.403, 2000, p. 414.

  36. ibid.

References

Cases

  • Anon (1477) YB 17 Edw 4, fo 1, pl 2

  • Kennedy v. Lee (1817) 3 Mer 441

  • L’Estrange v Graucob (1934) 2 KB 394 at 403 per Scrutton LJ

  • State Farm Mutual Automobile Insurance Co v Bockhurst 453 F.2d 533 (10th Cir. 1972)

  • Storer v Manchester City Council (1974) 3 All ER 824

  • Thornton v Shoe Lane Parking (1971) 2QB 169

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Correspondence to Emad Abdel Rahim Dahiyat.

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Dahiyat, E.A.R. Intelligent agents and contracts: Is a conceptual rethink imperative?. Artif Intell Law 15, 375–390 (2007). https://doi.org/10.1007/s10506-007-9047-z

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