With the rise of Uber rides and Airbnb rentals, how we create and enforce contracts has been completely transformed. The old law of contract, based on centuries of precepts of offer, acceptance, consideration, and consent, is being pushed to its limits by the digital technologies that are increasingly central to our world. My new research examines how click-wrap agreements and artificial intelligence (AI)-based enforcement are remaking contract law and raising hot questions about fairness, consent, and accountability.
In its essence, the traditional law of contracts is based on mutual assent — the concept of two parties freely and willingly agreeing to conditions following effective negotiation. But on online sites and services, users are regularly faced with boilerplate, non-negotiable "click-wrap" contracts. By the mere click on "I agree," people commit themselves to dense conditions and terms without reading or comprehending them. The technical formalities of offering and acceptance are complied with, but the substance of authentic consent is erased.
The leading case law of Specht v. Netscape Communications Corp. (2002) and Nguyen v. Barnes & Noble Inc. (2014) demonstrates judicial reluctance to enforce click-wrap agreements where there is insufficient notice of terms. Courts now emphasise that effective consent will need to be more than a cursory click. By analogy to L'Estrange v. F Graucob Ltd [1934] 2 KB 394, where signing bound a party, the understanding of terms is even less secure in the digital environment, according to Ruhl.
Services such as Uber and Airbnb epitomise this practice. Their user contracts, drafted as click-wrap agreements, value speed and consistency at the expense of full agreement. My study revealed that courts typically enforce these contracts so long as notice is given. But mere availability of conditions hidden behind hyperlinks barely realises the traditional ideal of consent. Most people, pressed by urgency to use services, forego reading these contracts. This "click and forget" syndrome, described by Brownsword and Goodwin, amounts to a fiction of consent, destroying the very essence of contract law.
While digital platforms continue to redefine economic and social interactions, the integrity of our legal traditions need not be sacrificed on the altar of convenience
Aside from contract formation, enforcement on the platform now relies heavily on AI and algorithmic systems to track compliance and penalise deviations. For example, Uber drivers can be deactivated according to customers' ratings or patterns of cancellations — decisions made without any human input. Airbnb hosts can have their listings de-prioritised or eliminated according to opaque algorithmic decisions.
Such automation of enforcement poses deep challenges to conventional ideals of procedural fairness. By their very nature, enforcement under classical contract law requires human adjudication, offering opportunities for explanation, appeal, and equitable discretion. AI-enforcement systems, by contrast, are “black box” systems that make decisions without transparency or scrutiny. Users frequently have no effective means to challenge penalties or to discover the grounds for them. Scholars, such as Brownsword and Goodwin, caution that such "techno-regulation" substitutes human judgment for algorithmic dictate, a worry also raised by Kaminski, who calls this phenomenon “binary governance.”
My cross-jurisdictional analysis — of the United Kingdom, Australia, Sweden, and the European Union — demonstrates that legal frameworks are lagging. The European Court of Justice, for its part, acknowledged Uber's dominant control of labor conditions in Asociación Profesional Elite Taxi v. Uber Systems Spain SL (C-434/15), heralding the dawn of more severe regulation. The European Union, however, in its Digital Services Act and Digital Markets Act, marks steps toward platform accountability and transparency regarding algorithms. No jurisdiction, though, has yet endorsed full implementation of AI-enforced click-wrap agreements.
Ethics are at stake. Classic notions of contract law are based on a fair playing field where parties have roughly equal leverage. But online platforms have huge advantages. They write the contracts, make the rules, enforce compliance, and resolve disputes — frequently without outside scrutiny. This concentration of authority imperils fairness and even the justification for the judicial system.
In addition, the monetisation of personal information as "consideration" for services on the platform makes it more difficult to sustain traditional notions of value exchange. Users are de facto paying by giving up their privacy, possibly unaware of the full implications for what they are relinquishing. Scholars such as Katz and Brownsword and Goodwin have documented how data-driven models undermine traditional conceptions of consideration and value and how they use behavioral insights to shift more power to their side of the negotiation.
The time for reform is now. Courts need to break free from the formalistic approval of click-wrap contracts and examine the substantive fairness of these contracts. Regulators need to enforce provisions requiring clear and understandable summaries of conditions, opt-in consent for privacy-sensitive conditions, and effective processes for human appeals from decisions made by automated enforcement systems. Doctrines such as unconscionability, used to shield weak parties from exploitation in decisions such as Dynamex Operations West, Inc. v. Superior Court (2018), need to be reinvigorated for the digital world.
Platforms themselves need to adopt ethical design. Contracts need to be layered so they are easy to understand, and essential conditions need to be made conspicuous. AI tools deployed for enforcement need to be explainable and traceable to humans. Otherwise, the platform economy will degenerate into one of private ordering and code-based law that dispossesses users of their autonomous choices.
My study requires us to rethink the very bedrock of the law of contracts from the perspective of contemporary realities of technology. We need to reaffirm the centrality of informed consent, fairness of process, and substantive fairness to contracting. The law needs to adapt so that efficiency is not achieved at the cost of basic rights.
In the end, while digital platforms continue to redefine economic and social interactions, the integrity of our legal traditions need not be sacrificed on the altar of convenience. The challenge facing us is to update contract law without forsaking its core values. Only then shall we be able to ensure that promises we make — no matter if they are sealed by a handshake or a click — are binding, equitable, and just.