14 - Algorithmic Contracts and Consumer Privacy

Summary

Chapter 14 defines the term algorithmic contract, distinguishing it from the term smart contract, and justifying the need for the term. Then, it argues that business-to-consumer algorithmic contracts present distinct issues from business-to-business algorithmic contracts. In particular, Chapter 14 argues that privacy is the canary in the coalmine with respect to the potential threat to civil liberties presented by personalized law by way of pseudo-contract regime. Without any deliberate choice on the part of consumers or change in attitudes, contracts and practices have severely eroded consumer privacy over the past two decades. Thus, privacy terms provide an ideal case study to examine what limits on the ability of consumers to contract with businesses using algorithms to determine customized terms might look like. Personalized law, in the absence of proper fiduciary incentives or default rules, could be a major threat to the civil liberties necessary for a liberal society.