Artificial intelligence, also known as AI, according to John Frank, is any device or piece of software that can mimic one or more aspects of human intellect. This indicates that without human input, the computer does conduct the tasks automatically. AI may be utilised in a variety of ways to improve people's lives in modern society, one of which is as a method to create contracts between parties that have legal repercussions.  

Defining AI contracts 

What qualifies as an artificially intelligent-formed contract is the next crucial point that must be addressed. Individuals submit predetermined information into a program, and the software processes the information based on algorithms without human intervention. This is known as an artificial intelligence contract. The algorithm operates on work based on patterns and data analysis that are learnt by the computer or other artificial intelligence techniques. The algorithm generates the work on its own and is a crucial component of artificial intelligence. Another important aspect of AI is its ability to create tasks far faster than human beings can. Large data sets may be analysed by algorithms, which can then be used to generate new work. The data generated by AI can also be highly diverse and varied. The work produced by AI can occasionally lack the subjective and emotional components that are naturally tied to human abilities; this can be seen as a weakness of AI. 

AI in everyday reality  

It is possible to compare artificial intelligence's notion of contracting to the traditional definition of contracting. An agreement made between two or more parties with the goal of establishing legal responsibilities is commonly referred to as a contract. Several conditions must be met for the agreement to be one that the law recognises as binding on the parties. Even if one of the necessary conditions fails to be satisfied, the contract will be deemed invalid. 

Contrary to the creation of an AI contract, where the data is created regardless of discrepancy between parties, the prerequisites for the traditional contract are that the minds of the parties must meet. The prerequisites are that both parties must be of legal age to contract, that the agreement must follow specific formalities known as prescribed formalities, and that it must be legal and not prohibited by legislation or common law. Finally, the agreement must have determinable content, and the agreed responsibilities must be performable. 

The requirements of AI-generated contracts and the requirements of traditional contracting are very different from one another. The parties to a traditional contract will find it easier to enforce their contract in a court of law because of the human oversight element, whereas, in an AI-generated contract, the parties will find it difficult to enforce their contracts because there is no human oversight in the contracting process. The traditional form of contracting supports the constitutional notion of legal certainty, which will prevail in South Africa as the Constitution is the supreme law. If a court is satisfied that the parties intended to enter into a binding agreement, and if there is an objective standard capable of determination and application, the court will give effect to the contract. 

Conclusion 

AI is the future. Hence, society needs to encourage the use of AI. However, in particular times of the current stage, AI can only be used as a tool for assistance. Hence, not too far in the future, AI contracts will be able to be presented indecently.

Written by Riaan Basson, Candidate Attorney, SchoemanLaw