Contracts in the Era of Artificial Intelligence - Challenges, European Regulation and Technological Impact

Abstract

This paper explores the necessity of establishing a unified European framework for regulating AI-driven contracts. As automation and algorithmic decision-making increasingly shape economic and legal transactions, traditional principles of contract law—such as mutual consent, contractual capacity, and legal certainty—are challenged by the emergence of smart systems capable of forming and executing agreements without human oversight. The study begins by outlining the rapid evolution of algorithm-based contracts, particularly those deployed in digital marketplaces, financial technologies, and logistics. These contracts promise efficiency and scalability, yet raise significant legal concerns regarding enforceability, fairness, and liability. The lack of consistent terminology and recognition of AI as a contracting agent exposes parties to asymmetric power dynamics and unclear dispute resolution pathways.