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Abstract:
In the past three years, the technology of Expert Systems, underneath the broader field of Artificial Intelligence (AI), has taken on a new role in the use of contracts in the financial sector. JP Morgan Chase is currently using Expert Systems to build algorithms that evaluate credit and underwrite risk. It is possible that in the future these systems could evolve to be used to draw up unilateral contracts for investors and clients. The validity and enforceability of unilateral contracts is a matter of law in both Federal and State statutes. Currently neither Federal nor State lawmakers have passed regulations specific to Artificial Intelligence. As financial institutions seek to use Expert Systems to increase the efficiency of their business, the questions should be asked about the validity of the contracts. Normally Expert Systems undergo constant review to ensure false positives and negatives are not categorized as such. The United States Court System has no precedent for a false positive contract going to trial for a breach committed by either party. Herein lies a thought experiment on the background of such a contract when Expert Systems are in use not only with J.P. Morgan and Chase, but other financial institutions as well, and how navigating through the court system would work possibly when the document in question is a contract written by Expert Systems and executed by the parties with no oversight by an attorney.
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