Private Law Theory

ABSTRACT
Every day, millions of agreements are automatically concluded across diverse industries, with algorithms making decisions and determining contractual terms, such as price, quality and quantity, and selecting counterparties. However, traditional contract law is based on the assumption that transactions were necessarily made between humans. Although algorithmic contracting has become an integral part of contemporary commerce, longstanding concerns persist over whether such agreements satisfy the requirements of contract formation and how contract law should respond to unanticipated and/or undesirable algorithmic outcomes. This article argues that the crux of these perceived ‘contracting problems’ – the alleged absence of intention to be bound on the part of users in algorithmic contracting-is illusory. Users who deploy algorithms to transact possess a pre-existing, general intention to be bound provided that the agreements formed by their algorithms remain within the bounds of commercial possibility. This account not only affirms the enforceability of algorithmic contracts under existing contract law but also answers the question of how ‘unintended’ contracts should be addressed. Users must accept the risk that algorithms may generate unintended outcomes, which may result from their own erroneous instructions, programming defects, or even the correct but unexpected operation of algorithms. According to the objective theory, the counterparty, who cannot trace the origin of the statements or discern whether they are ‘unintended’, should be entitled to rely on the statements of algorithms. However, an exception should be made if the agreement is ‘commercially impossible’ in the sense that no reasonable person in the counterparty’s position would believe that the user, as a commercially rational actor, intended to be bound. These types of agreements fall outside the user’s intention and should not be enforceable. This paper primarily draws on contract law of England and the United States, while also considering relevant authorities and scholarship from other common law jurisdictions, such as Australia and Singapore. The analysis and proposed views should be applicable across common law jurisdictions.

Lin, Siyi, The Illusory Problem of Intention in Algorithmic Contracts (December 30, 2025).