Table of contents
The Basics: Offer and Acceptance in the Digital Age
Traditionally, an offer is a clear proposal by one party, and acceptance seals the deal—boom, a legally binding contract. But when AI enters the scene, things get interesting. Automated systems generate offers based on templates, legal databases, or transaction patterns, while smart contracts self-execute on the blockchain when conditions are met.
While this speeds up the processes, it raises legal challenges: Can AI truly "accept" an offer? What if a contract is triggered by mistake? How do disputes work when no human is involved? Let’s explore how automated contracting plays out in real life.
Real-World Applications: Where AI Contracts Take Over
1. E-Commerce & Supplier Agreements – The Amazon Model
Amazon isn’t just a retail giant; it’s an AI-powered contracting hub. When a supplier lists products, AI generates contracts covering price, delivery, and payment terms. The moment a buyer clicks ‘purchase’ and conditions are met, acceptance is automatic—no human required.
Sounds efficient, right? But what if AI miscalculates a discount, leading to unintended bulk purchases? Or if a supplier disputes a clause they never explicitly agreed to? These grey areas highlight the legal challenges of AI-driven contracts.
2. Decentralized Finance (DeFi) – Lending Without Banks
DeFi platforms like Aave and Uniswap have redefined contracting. Lenders provide crypto assets, and borrowers accept terms automatically by securing collateral. Smart contracts execute transactions instantly, enforcing repayments and liquidating assets if conditions aren’t met.
The upside? Speed, efficiency, and no intermediaries. The downside? A borrower locking in a bad deal due to market shifts can’t easily back out—"code is law," and what’s done is done.
3. Insurance Claims – No More Paperwork?
InsurTech is using AI-powered smart contracts to process claims in minutes instead of weeks. Picture this: Your car accident data is linked to a blockchain-based policy. If verified, the contract approves your claim and transfers the pay-out—no forms, no phone calls.
But what if the AI misattributes fault? Automated decisions make disputes tricky when policyholders need to challenge unfair outcomes.
4. AI-Generated Employment Contracts – The HR Revolution
AI-powered hiring platforms are automating job offers. Resumes are scanned, candidates are matched, and AI-generated contracts land in inboxes. Acceptance? A simple electronic signature seals the deal, no recruiter is needed.
But what if an applicant disputes salary terms due to a misunderstanding? Can they argue they didn’t "fully agree" because no human explained the details? These questions highlight the legal nuances of AI-driven employment agreements.
5. Machine-to-Machine (M2M) Contracts – When Devices Make Deals
Autonomous vehicles negotiating ride payments, smart meters managing energy contracts, AI-powered logistics platforms scheduling shipments, it’s not sci-fi, it’s happening now. In an M2M economy, devices enter legally binding agreements without human intervention.
Take Tesla’s self-driving taxis. A rider books a trip, and an autonomous vehicle accepts, processes payment, and completes the service, all through automated contracts. But what if the AI overcharges due to a miscalculated surge price? Who’s responsible for a machine-driven transaction? We are not even touching on other possibilities like human safety etc. of course that is the utmost priority but they are not the focus point of this Blog.
Custobots, Perplexity AI, and the Future of Contracting
AI-powered agents like Custobots and Perplexity AI are revolutionizing contracting. Custobots, acting as algorithmic consumers, make purchasing decisions and enter contracts on behalf of users. They don’t negotiate; they analyze market trends and execute deals instantly.
For example, a Custobot managing a retail chain’s inventory might auto-contract bulk purchases when prices drop. But if a supplier lists an incorrect price, who’s liable? The AI? The user? The seller?
Meanwhile, Perplexity AI is streamlining contract review for legal teams, analysing thousands of clauses, identifying risks, and suggesting amendments in real time. But if an AI-generated contract contains an error, does responsibility lie with the AI, the lawyer using it, or the deploying company?
Final Thoughts: Contracts at the Speed of AI
AI-driven contracting is reshaping business, but it comes with legal complexities. While automation brings speed and efficiency, the question of liability, dispute resolution, and intent in AI-driven agreements remains a legal frontier.
Want to stay ahead of the AI contracting curve? Get in touch with White Bison.
