7 - Algorithms, Agreements, and Agency

Summary

This chapter’s thesis is simple: as a general matter, agreements are a functional and conceptually straightforward way for the law to recognize algorithms. In particular, using agreements to recognize algorithms into the law is better than trying to use the law of agency to do so.¹ Casual speech and conceptualism have led to the commonplace notion of “electronic agents,” but the law of agreements is a more functional entry point for algorithms to interact with the law than the concept of vicarious action. Algorithms need not involve any vicarious action, and most of the law of agency translates very poorly to algorithms that lack intent, reasonable understanding, and legal personality in their own right; instead, algorithms cause activity that may have contractual or other agreement-based legal significance. Recognizing the power (and perhaps the necessity) of addressing algorithms by means of the law governing agreements and other legal instruments can free us from formalistic attempts to shoehorn algorithms into a limited set of existing legal categories.