Guiding Principles and Model Rules on Algorithmic Contracts

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Quick Facts

Project Type: Guiding Principles and Model Rules
Procedure: Regular
Adopted: CD 2022/4
Project Period: March 2022–2024/2025

Background

A growing use of algorithms and artificial intelligence (AI) is being observed in all phases of contracts from formation to performance and it has already given rise to significant academic contributions and court-rulings. In addition, policymakers at national, regional and global level are investigating the potential legal implications of this development.

The need to provide legal certainty in the use of algorithmic decision-making (ADM) in any phase of contract life cycles is vital to usher in a new generation of digital contracts. The pervasive use of algorithms and AI learning systems in transactional contexts raises the pressing need to address the legal challenges of autonomous contracts and reconsider the basis of contract law in AI-dominated scenarios. Fostering innovation and unleashing the social benefits and the economic potential of AI require sound guidance for providers, operators, and market actors with a clear and predictable legal framework. Concurrently, establishing effective safeguards to ensure the protection of consumers, to guarantee the validity and the enforceability of contracts where ADM has been used, and to protect the rights, freedoms, and legitimate interests of all parties involved is instrumental in defining an enabling legal framework for automated and autonomous contracting in Europe.

The project focuses on the use of ADM, and in particular AI-driven learning systems, in the various stages of the contract life cycle. This approach comprises automated contracting generally, and autonomous contracting specifically.

 

Aim

The project aims to assess, firstly, the adequacy of the existing EU consumer law for the use of ADM in contracts and, subsequently, identify gaps to fill and the necessary legal steps required to facilitate autonomous contracting in B2B, B2C, P2P and M2M transactions.

 

Outcome

The project will be conducted in two stages. The main output of the first stage will be an annotated commentary of existing EU consumer law directives indicating the suitability and the adequacy of such provisions to the use of ADM in consumer contracts (‘ADM readiness’).

In the second phase, the Project Team will focus on the formulation of Guiding Principles and Model Rules for the use of ADM in contractual relationships, covering automated/autonomous contracting in any type of transactional relationship (B2B, B2C, P2P, M2M, etc).

Events, Publications and Other Activities

For an overview of past and upcoming events of this project, please click here.