Is a Contract with a Computer Program Enforceable?

Contracting with artificial intelligence

By Benjy Schirm, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on January 19, 2024

Use these links to jump to different sections:

The common fears around giving AI power are rooted in visions of HAL and Skynet—computers that are given full autonomy end up subverting the humans that created them.

Taking this to the real world, Google Translate is a handy modern feature that translates between a multitude of languages using AI technology. It was coded by engineers to translate in the most efficient manner, and the software program wrote its own language to do so—a language no one knows or can fully explain.

In a movie, this is where a dramatic noise would be inserted.

Applying Contract Law to Agreements Between Humans and Machines

These days, humans enter into agreements with website programs every day—especially when goods are bought and sold online. But the legal question is: Are these contracts valid when they aren’t between two people but rather a person and a machine?

One of the basic definitions of contract law is that there is an agreement between two or more parties (legal entities). Traditionally, this was two people who agreed on the terms of the agreement and the consideration or payment for various goods or services that will be rendered by the party to the contract.

In the event of a breach of contract, one contracting party could take action through the legal system to enforce the agreement.

Google’s new assistant features include the ability to have a computer program schedule appointments for you—even if those appointments are dinner reservations with a non-refundable reservation fee. So, in essence, this is artificial intelligence forming contracts with businesses.

By the letter of the governing law, contracts may be made between parties through intermediaries or agents. Frequently, contracts are made for businesses through agents that have been given the authority to act on the business’s or principal’s behalf. In many ways, our ability to contract is based on our legal status and who holds the authority to act on that status.

In the absence of state laws controlling contracts with AI, the common law of contracts would control.

Can Computers Act as Agents For a Business?

The definition of an agent acting on behalf of a principal is that they have defined boundaries to their authority.

Through one set of eyes, computers are simply machines that allow us to do things we tell them faster and more efficiently and, given the proper guidance, can make our lives so much easier. Through another lens, they create more grey areas and complications.

No matter where you sit, you will probably make a binding contract with a computer at some point.

If you are entering into agreements without knowing the entity on the other end of the transaction, you are putting yourself at risk. If your company is utilizing new technology for efficiency, be certain that you have all of your policies labeling out the authority and limitations given to these programs to protect your future.

If you have questions or concerns about business transactions involving technology, smart contract formation, or software license agreements, consider contacting an experienced and reputable contracts attorney for legal advice and guidance along the way. If you’d like more general information about this area of the law, see our overviews of contract law and technology transactions.

Was this helpful?

What do I do next?

Enter your location below to get connected with a qualified attorney today.

State Technology Transactions articles

0 suggestions available Use up and down arrow keys to navigate. Touch device users, explore by touch or with swipe gestures.

At Super Lawyers, we know legal issues can be stressful and confusing. We are committed to providing you with reliable legal information in a way that is easy to understand. Our legal resources pages are created by experienced attorney writers and writers that specialize in legal content in consultation with the top attorneys that make our Super Lawyers lists. We strive to present information in a neutral and unbiased way, so that you can make informed decisions based on your legal circumstances.

0 suggestions available Use up and down arrow keys to navigate. Touch device users, explore by touch or with swipe gestures.

Find top lawyers with confidence

The Super Lawyers patented selection process is peer influenced and research driven, selecting the top 5% of attorneys to the Super Lawyers lists each year. We know lawyers and make it easy to connect with them.

Find a lawyer near you