Algorithmic contracts in modern contract law: Concept, legal nature, and fundamental legal issues

Abstract

The development of digital technologies has led to noticeable changes in the manner in which contracts are concluded and performed. Within this framework, algorithmic contracts have emerged as one of the forms of contemporary contracting. The subject matter of this paper is the analysis of algorithmic contracts in modern contract law, with particular emphasis on their concept, legal nature, and relationship to the traditional contract, the electronic contract, and the smart contract. The aim of the paper is to determine whether algorithmic contracts constitute a new legal institution or merely a specific form of contemporary contracting based on the application of digital technology, as well as to identify the fundamental legal issues arising in connection with their conclusion and performance. The paper is theoretical in nature and is based on the normative and comparative legal methods, along with an analysis of relevant domestic and foreign literature and legal sources. The main hypothesis of the paper is that algorithmic contracts do not constitute a separate and autonomous legal institution, but rather a specific form of contemporary contracting in which the existing rules of contract law continue to apply, subject to certain particularities arising from the use of digital technology and automation. The analysis shows that algorithmic contracts do not fall outside the framework of the general rules of contract law, but that there are certain distinctions of a qualitatively legal nature relating to issues of consent, attribution of decision-making, control over performance, and liability for the outcome of the automated process. Their significance, therefore, does not lie in the creation of a new branch of contract law, but in the fact that they clearly reveal the limits of the existing one.