Discretionary enforcement of electronic contracts

TLDR

In e‑business, parties are expected to act in good faith and comply with contract terms, yet deviations can arise intentionally or due to force majeure. The study proposes automated support levels to address contract non‑compliance in e‑marketplaces for optimal outcomes. The authors monitor key contract events, notify parties of non‑compliance, and employ both nondiscretionary and discretionary enforcement mechanisms—control methods that extend a prior contract‑management architecture.

Abstract

As in traditional commerce, parties to a contract in e-business environments are expected to operate in good faith and comply with mutually agreed terms of the contract. It may be the case however that deviation from the agreed contract obligations occur either intentionally or due to force majeure. We argue that there is value in providing various levels of automated support to deal with contract non-compliance in e-marketplaces in order to reach the best overall outcome for all parties. This includes monitoring contract significant events, simple notifications to the parties about non-compliance events and a range of enforcement mechanisms. These mechanisms can be either nondiscretionary (as in preventive security mechanisms) or discretionary, which rely on a number of control mechanisms that are applied when contract rules are violated. We describe a number of such control mechanisms and how they can be used to extend capabilities of a contract management architecture previously developed.