ABSTRACT
The emergence of smart contracts and the increasing integration of Artificial Intelligence (AI) have introduced new dimensions to traditional contract law. This research paper explores the impact of artificial intelligence (AI) on contract law in India, with a particular focus on policy design and agreement formation. It examines the pros and cons of AI’s involvement in contract law, particularly highlighting the potential for error and subsequent regret when AI-generated contracts are blindly accepted. While AI helps in providing advanced insights and effectively structuring contracts, its limitations will become apparent in cases of oversight and misinterpretation. As the global landscape moves towards technological integration, Canada has already embraced AI for civil and common law contracts. However, challenges remain as AI struggles to adapt to evolving legal frameworks and regulations, underscoring the need to understand the possibilities and limitations of AI in contract law. Automating decision-making processes with artificial intelligence using inputs extracted from data and guided by predefined algorithms or a combination of other factors raises serious concerns about over-reliance and potential long-term effects. Delegating such decision-making powers to AI may gradually erode human independence and cause humans to routinely delegate important decisions to AI systems. While the predictive capabilities of artificial intelligence and the ability to handle large-scale tasks are undeniable advantages, it is important to prevent the disruption of human decision-making abilities. Vigilance is required to avoid deviations from these standards, thus preserving the integrity of AI-based decision-making processes and preventing potential harm to individuals and society as a whole. Additionally, it is important to note that current AI technologies may not be powerful enough to handle the inherent complexity of automated decision-making. The regulatory and legal environment is constantly changing and new obligations are introduced regularly. AI systems may struggle to quickly adapt to these dynamic legal frameworks. Therefore, relying solely on AI to make decisions without proper human oversight can carry significant risks, especially in environments where compliance with rapidly changing regulations is important. Therefore, a prudent approach is required, emphasizing the need for continuous human participation and oversight in the decision-making process to ensure compliance with evolving legal and ethical standards.
Mistry, Jash, AI Takes the Gavel: Contract Laws’ New Sidekick in Automated Decision-Making (April 6, 2024).
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