ABSTRACT
The principles of contract law have shown continued resilience in light of constant technological developments, including the mainstream adoption of the Internet. The ability to absorb technological change may be attributable to the broad manner of their formulation. For example, the foundational proposition that ‘legal intention can be expressed in any manner’ has enabled the nearly seamless acceptance of online contracting. If intention can be manifested by a nod or a handshake, it can also take the form of a click or a swipe. Similarly, the requirement of consideration can be met not only by peppercorns or money, but also by one’s permission to share personal information in return for the provision of online content and services. While the Internet hardly creates academic excitement anymore, a number of internet-related technologies may pose a challenge to the principles of contract law and may, finally, test their flexibility. Purportedly, blockchain-based smart contracts, which are often defined as the encoding of legal terms in self-executing computer code, enable not only the automation of performance but also the delegation of enforcement to immutable code. The theory is that if both performance and enforcement are entrusted to impartial machines, breach becomes impossible. Smart contracts are also premised on the ability to translate contractual obligations into algorithms – a process aimed at the elimination of ambiguity and enhancement of legal certainty. Abstracting from technological minutiae, we must inquire whether, or to what extent, such ‘operations’ are desirable or legally permissible. The challenges of automation are further aggravated by advancements in artificial intelligence. The accompanying problems exceed those inherent in the possibility of inadvertent orders, unforeseen transactions or computer errors. We are forced to inquire whether such technological phenomena as algorithmic trading, machine learning or autonomous agents affect the existence of intention and, on a broader level, raise problems concerning the validity and enforceability of any resulting contract – if only due to the unprecedented transactional imbalances introduced by them. An additional set of difficulties concerns ubiquitous computing, loosely defined as the user-facing technologies involving the Internet-of-Things (‘IoT’). Smart objects and self-checkout terminals blur the division between online and offline environments and force a revision of our understanding of ‘online contracting.’ When the Internet spills over our computer screens and when we encounter requests for consent and contractual terms in contexts that have traditionally been non-commercial, it becomes difficult to rely on such basic principles as the objective theory of contract or on the presumption that in commercial contexts the parties intend to be legally bound. The point is not to question the continued applicability of such principles or presumptions but to illustrate the difficulty in their application. In sum, my chapter explores the legal implications of the said technologies and, while abstaining from unnecessary futurism, presents a realistic picture of their legal relevance. Particular attention is devoted to the overreaching question whether the principles of contract law, in their traditional formulation, are capable of accommodating (or withstanding?) technological change. While it is difficult to predict technological trajectories and future legal developments, it is possible to extrapolate from existing trends and anticipate certain theoretical bottlenecks created by technological change.
