We earn commissions when you shop through the links below.
Online contracts continue to evolve alongside technological innovation. Courts have developed a substantial body of doctrine around clickwrap, browsewrap, and adhesion contracts, but blockchain-based smart contracts, AI-mediated assent, and new modes of digital interaction raise unresolved doctrinal questions. This post considers how existing U.S. contract principles may apply to future developments.
1. Smart Contracts on the Blockchain
Definition: Smart contracts are self-executing agreements, coded to perform automatically when predefined conditions are met.
Doctrinal Considerations:
- Offer and Acceptance: Courts must determine whether interacting with blockchain code (e.g., executing a transaction on Ethereum) constitutes valid assent. Traditional doctrine requires manifestation of mutual assent(Restatement (Second) of Contracts § 22).
- Interpretation Issues: Unlike written contracts, smart contracts are expressed in code. Courts may need to translate code into contractual intent, invoking doctrines of ambiguity and construction.
- Immutability vs. Modification: Blockchain immutability challenges doctrines allowing contractual modification by mutual agreement.
Case Law: Few U.S. decisions directly address blockchain contracts. However, courts have historically adapted to new technologies (e.g., shrinkwrap in Hill v. Gateway 2000, clickwrap in Meyer v. Uber), suggesting they will extend existing principles rather than create entirely new doctrines.
2. AI and Automated Contracting
Definition: AI increasingly facilitates contract formation — drafting terms, presenting offers, and even simulating negotiation.
Doctrinal Considerations:
- Agency Principles: Under traditional law, an AI system may be treated as an agent of its operator. Assent generated by an AI could be imputed to the principal under Restatement (Third) of Agency § 1.01.
- Capacity and Mistake: If AI errors create unintended obligations, courts may apply doctrines of mutual mistakeor unilateral mistake to rescind or reform contracts.
- Disclosure: Courts may eventually scrutinize whether failure to disclose AI-driven contracting constitutes procedural unconscionability.
Case Law: U.S. courts have not yet squarely addressed AI-mediated assent, but analogies to electronic agents under the Uniform Electronic Transactions Act (UETA) § 14 and the E-SIGN Act suggest enforceability if the AI’s actions reasonably represent the principal’s intent.
3. Biometrics and Assent
Trend: Increasing use of biometric identifiers (fingerprint, face scan) to authenticate assent.
Doctrinal Considerations:
- Courts may treat biometric assent as equivalent to digital signatures under the E-SIGN Act, 15 U.S.C. § 7001.
- Challenges may arise under state biometric privacy statutes (e.g., Illinois’ Biometric Information Privacy Act, BIPA), limiting how companies can use such identifiers in contract formation.
4. The Expanding Role of Public Policy and Statutory Law
As contracts intersect with emerging technologies, statutory frameworks may limit what private agreements can achieve.
- Data protection statutes (CCPA, HIPAA) constrain contractual waivers of privacy rights.
- Consumer protection regimes may adapt to AI-driven adhesion contracts.
- Legislative proposals on blockchain and AI could impose disclosure or fairness obligations beyond common law contract doctrine.
5. Doctrinal Trajectory
The pattern in U.S. law has been incremental adaptation:
- Shrinkwrap → Hill v. Gateway 2000 (7th Cir. 1997)
- Browsewrap → Specht v. Netscape (2d Cir. 2002)
- Clickwrap/Sign-in-wrap → Meyer v. Uber (2d Cir. 2017)
Courts are likely to treat smart contracts, AI-mediated assent, and biometric authentication as new iterations of assent and enforcement questions, applying traditional doctrines of offer, acceptance, unconscionability, and public policy.
Key Takeaways
- Smart contracts raise questions of interpretation and modification but will likely be analyzed under existing doctrines of assent and mistake.
- AI-mediated assent will be evaluated under agency law and electronic contracting statutes.
- Biometric assent is doctrinally compatible with electronic signature regimes but constrained by privacy statutes.
- Public policy and statutory law will play a larger role as contracts intersect with sensitive technologies like AI and blockchain.
Conclusion
The future of digital contracts will not abandon traditional doctrines. Instead, courts will extend principles of assent, unconscionability, and public policy to novel technological contexts. Just as shrinkwrap and clickwrap were integrated into contract law, blockchain and AI will be judged through the same doctrinal lens, with statutory overlays providing necessary consumer protections.
If you want to read more about the Future of Digital Contracts, please see Recommended Books.
