Levine constantly brings this up related to blockchain; people (for the most part) don't actually want completely and utterly binding contracts. We want things that reflect what we bargained for and protects us when things go sideways, but not something that arbitrarily and absolutely enforces technicalities that perhaps weren't in the spirit of the agreement. Turns out it's useful to have wiggle room; it's a feature, not a bug.
A bunch of replies to your comment, but none have (clearly) pointed out that this isn't actually an example of "wiggle room" in action.
The mistake was corrected because both parties agreed to change the contract. If they hadn't agreed and the issue had been brought to court, the $400 million number almost certainly would have been enforced. In cases where contract text is ambiguous, unclear, or just self-evidently illogical, the legal system does grant some wiggle room for a judge to try to tease out the intent. But a mere disagreement between the text and some email(s), AFAIK, wouldn't meet that standard.
On the other hand, even on the blockchain it's not hard to make a contract amendable with unanimous consent.
> even on the blockchain it's not hard to make a contract amendable with unanimous consent.
Unanimous consent is nice when it happens, but we typically want the ability to make amendments without unanimous consent, too.
Concrete examples: I wouldn't want to use an electronic payment card that doesn't have some sort of chargeback mechanism. My mutual funds want the exchanges they operate on to have some mechanism for busting erroneous trades, and I'm glad that they do. When I check in at a hotel, they want a credit card on file, so that they can charge me if I steal the towels.
All of these mechanisms involve retroactively altering the financial terms of a contract in a way that causes one person to lose some money without their consent. For the most part, people agree that this is just and desirable, because they also value fairness.
That said, I agree on the point at hand -- I don't think that the example from the story is particularly relevant here.
I don't think these examples retroactively alter the financial terms of a contract. Rather, I think they invoke the contract to retroactively alter the financial terms of the transaction. But I do agree we want to be able to do that, and mediums that disallow it are less useful.
All of those examples are just passing off the risk of a bad deal from one person or business to another. The article is specifically about how the wording of a contract doesn't matter when both people are happy with it and want it to work.
If you want chargebacks and etc in Bitcoin that's perfectly possible but it's going to end up working the same way. There's always risk in dealing with a stranger.
Chargebacks can be settled by arbitration with the merchant in the case of a purchase. That's actually more in line with the dispute resolution pushed by sharing economy services that people are familiar with like Uber, Lyft, Airbnb, etc.
Amazon has more of a vested interest in resolving a dispute with a customer than say Uber resolving a dispute with a rider. Even if the rider stops using the service Uber still has the business of the driver.
Consumers, knowingly or not, have shown that they are okay with this model. I think arbitration would likely be seen as an acceptable option.
I may have been a bit too confident about whether the text would have been enforced. It actually is possible (in the United States) for a court to alter the terms based on evidence of a clerical error, if the evidence is strong enough.
To summarize, there's something called the "parol evidence rule" which boils down to: if you have a final written agreement, and the text of the agreement is clear, you usually can't introduce extrinsic evidence (e.g. from the negotiation process) that the parties' intent was something other than what was written. However, there are a number of exceptions to that rule, and one of them is that you can introduce extrinsic evidence to try to prove the existence of a "mutual mistake", which can be grounds for "reformation" of a contract (i.e. correcting the mistake). A "mutual mistake" is when both parties are mistaken; on the other hand, a "unilateral mistake" (by one party) generally will not be corrected, unless there's also an element of fraud. Mutual mistake must be proven by the high standard of "clear and convincing evidence", as opposed to the normal standard in civil cases of "preponderance of the evidence", and in general there's a heavy presumption that the text reflects the parties' intent. But "scrivener's error" is often a valid basis for showing a mutual mistake. It depends on the quality of the evidence; also, the standards vary somewhat by jurisdiction.
> On the other hand, even on the blockchain it's not hard to make a contract amendable with unanimous consent.
This. Both proponents and critics of blockchain often seem to forget that it's just technology. Entities trading on it and performing other actions are still subjects to applicable laws, whether they like it or not.
> If they hadn't agreed and the issue had been brought to court, the $400 million number almost certainly would have been enforced.
In the Netherlands, I wouldn't be so sure about that. Law says that the person signing the contract needs to be fully aware of what they're signing. If they can show an e-mail which shows they were expecting 425, it's completely up to the lawyer and will depend on context of the e-mail etc.
I agree. Similar thing applies to laws in general; I usually compare this "wiggle room" to grease in the gearbox. Without it, the gears of justice will stop turning, or even break down completely.
Putting perfect laws as code is essentially a humanlike-AI-complete problem. That is, the necessary code would also have to implicitly and completely implement our intuitions about morality, and the mechanisms behind emotions and suffering. We can't do that, so we need some wiggle room, to enable humans to be humane.
A good example of this concept in action is actually the whole Ethereum / DAO fiasco, where the contract code actually contained a bug. Turns out the bug was not intended to be “binding”, and thus the Ethereum chain was forked to undo any damage of the bug.
So seems like even the crypto / smart contract community agrees with this sentiment to some degree, although forking an entire block chain might be somewhat of a crude interpretation of “wiggle room”.
The way I understand it, the people behind Ethereum had significant skin in the game, in the form of lots of money/assets that got stolen, and that might have tainted their opinion about what to do
I recall that a second large theft [1] did not get a hard-fork resolution.
Whether it's due to bias from the core team or a wish to stay away from being a final arbitration after the first event, I'm not in a position to judge.
After reading the book Ordinary Injustice, I can assure you the US legal system is extremely far from humane. Our system is overworked, biased, and inherently breaking down in th invisible small courts of our country. Fairly enforced laws may seem inhumane, and I am sure there would need to be patches to any such system to refine the morality it reflects, but I am having a hard time imagining it being any less humane. Secondarily, you can simply issue a "fix" contract for 25 million extra. If the other business is operating in good faith, which they obviously were they would be just as willing to have an additional contract to make it right. I am not sure I am a fan of smart contracts or not yet. There can still also be overrides for humanitarian purposes.
I am skeptical that we can get well defined laws such that algorithmic enforcement is feasible before say mathematical proofs of computer software is widespread. If we can't/don't practically do the latter, I'm not sure how we expect the former to become possible in a general sense.
On the other hand, maybe there is a useful narrow subset of contracts/contract law that is possible to implement. Aren't there some contract areas which are written with fairly extensive references to some set of uniform agreements?
That seems to imply we need two pieces of code for "perfect laws as code": 1) that which writes/defines the laws and 2) that which interprets the prevailing milieu and determines the application of law.
Since we're speculating anyways, why not implement the whole system we currently have? Assuming humanlike-AI (heh!), the following services are imaginable:
1 AI Legislature
2 AI Judge
3 AI Lawyers
Govt programmers handle (1) and (2), applicants and respondents (or prosecution and defence) handle (3). AI Legislature determines laws according to citizen referendum and policy upon consultation with the the AI Judges. Each AI Lawyer makes arguments to the AI Judge who evaluates each against the law and jurisprudence to arrive at a judgement. Wiggle away!
As a final layer which arose out of the Luddite massacres of 2137-40, a group of rubber-stamping human judges at the top serving as final adjudicators and appellate court.
That's a problem, yes, but it seems a direct flip side of being able to show leniency, or rescue someone from bugs in the legal system. Not sure if we can have one without the other, so there's probably a balance to strike there.
> 2) A non-expert can't know whether they are breaking any laws in advance of action
That's true in current legal system, though I don't think it's a flip side the way selective enforcement is. In a system closer to ideal, you should be able to always know when you're breaking a law in advance; it's just that the system should have an ability to not enforce it in special circumstances.
> Putting perfect laws as code is essentially a humanlike-AI-complete problem. That is, the necessary code would also have to implicitly and completely implement our intuitions about morality, and the mechanisms behind emotions and suffering.
I don't think this applies to all areas of law. Take tax law, for instance. Is there any moral or ethical or otherwise well-founded argument in favour of having tax laws interpreted less strictly than a machine would?
There have been multiple tax tribunal cases in the UK over what constitutes a cake or a biscuit. We have seen multiple cases over the distinction between an employee and a self-employed contractor. Even if you have an ultra-minimalist flat tax code, you're still going to have disputes over what constitutes earned income and what is or isn't a legitimate business expense. Tax is hard.
And the funny thing is, this sounds entirely reasonable. As they say, knowledge is knowing that tomatoes are fruits; wisdom is knowing that you should not put them in a fruit salad.
Honestly this is just blatant sophistry, given that other 'fruits' include blueberries, pumpkins, cucumbers, avocados, peanuts, lima beans, raspberries, and arguably pinecones.
Well, are Pringles "potato chips" ("crisps")? The legal answer has changed over time and there are taxes to be paid in one case that's not paid in the other.
Jaffa Cakes, Budweiser, and other products have had similar cases in different places as to what they are or are not. They impact taxes, product labels, advertising, and more.
At one time there were customers who couldn't get budget room for a computer, so Digital Equipment Corporation sold them the Programmable Digital Processor because automated processing was fine. They made 14 minicomputers in the PDP line, and the PDP-11 was manufactured until 1996, just two years before the acquisition by Compaq. While this probably didn't save them or their customers taxes anywhere, it did help their customers the wiggle room to actually be customers in the 1960s. https://digital.com/about/dec/
Never underestimate the value of a good technicality or shrug off a negative one. They can be make-or-break details.
Not sure how deep you're intending to go on "tax law", but from my cursory knowledge I'd wonder if in judging eligibility for tax deductions related to disadvantaged status in society, or disability, we might be influenced by our moral compass, though I know not enough to validate if this wiggle room exists or not. I suppose the question further up is if it should exist, which is another matter entirely.
To my knowledge, even in existing legal systems financial laws are given much more leeway than other areas of the law. This is generally due to the well-founded belief that people working in the financial industry are going to find loopholes, and therefore many tax laws are non-specific. Compare to how some internet forums have rules along the lines of "don't be a jerk".
I am under the impression that Canada, for instance, has a law that basically says "if you do something just for the tax benefit we reserve the right to call you out".
Even without the "binding contract" aspect, the very concept of "put important code in the blockchain (where it can never be patched without the agreement of the entire community)" seems ... spooky. "Unpatchable code" is probably one of the most terrifying two-word phrases in the English language.
> The court orders the company to give back the money the contract gave them. They refuse.
This seems to have nothing to do with blockchains; the same situation could occur (and its consequences are important to investigate!) no matter what the circumstances that led up the court order.
Yes but with the difference that without blockchain the corporations bank will then do the deed and push the money back on court order. And if not possible the company will (to my knowledge in german legal code) be dissolved, assets sold and the profits go to the other side until the damage is covered, which is usually not the case and the winning party still looses money.
With blockchain there is no bank and if the company doesn't want to, the next option is nuclear as above.
With blockchain there is no way for the party to obtain what is rightfully theirs other than to nuclearize the other party.
Without there are options because banks and other intermediaries can intervene and correct.
Your second sentence is a non sequitur as well as being ageist and possibly mocking of people with Alzheimer's disease.
That's quite a lot for one sentence.
The quote he's spoofing is from Reagan, and there is a not small group of Americans who think the original quote was unduly harmful to politics and by extension social and cultural mores in the US.
I agree most contracts benefit from "wiggle room", however you can build wiggle room into blockchain-enforced smart contracts (e.x. by giving n-of-m arbiters/courts ability to override the outcome), but you can't build absolutely enforced "code as law" on existing legal systems.
I don't claim to know how useful this will actually be, but it seems like a potentially interesting new capability.
There's not many use cases where a purely technical solution has meaningful impact on the world, though. The "code-as-law" will generally have to be supported by "law-as-law" at some point, and that can be overturned arbitrarily.
What good is having technical ownership of some private key if your government declares you have to give it over or face jail?
For suitably powerful privacy coins, the government shouldn't be able to tell if you used your private key or not. So you claim you lost your private key and spend away. Of course, there has to be an off-ramp into the real world at some point, so all this actually gets you is access to the black market. Opinions may vary on how useful that is, and how much blockchain can succeed if it insists on fighting regulation tooth-and-claw.
Claiming you lost your key is called contempt in court. Judges generally don't take kindly to that tactic. A lot of people some how think they can "hack" the legal system...it generally doesn't work out so well for them.
Except you can still change something if it's on the blockchain, it's just that now you have an immutable record that it was changed.
So now if things go wrong, the other party suddenly decides they liked the old contract (which you'd signed) and you have yourself a court battle. If it's on the blockchain you can point to it and say, "yes we signed this old contract but you can tell here we both agreed to change it."
How does that differ from a standard legal agreement? At any time two parties can make a new agreeement, with or without a court battle. Your immutable record is documents filed with the government on public record.
> How does that differ from a standard legal agreement?
> Your immutable record is documents filed with the government
For people who don't necessarily trust the current and future government (to be both just and no inept at keeping accurate records), you've answered your own question.
> on public record.
One of the sales points of blackchain based contracts is that getting your details onto public record, and someone else verifying those details on the records, is easier. And in theory the record is not as easy to corrupt/disrupt/hide/block.
Caveat: I'm not more than an intrigued bystander on the whole blockchain thing ATM, so the details as I understand them may be quite wrong.
Tbh, I would prefer if things government related were set in stone. No ambiguity, send the money, be done.
The private sector can work with customers and are reliant on customers for business. This makes it so compromise and being reasonable is incentivized by additional profit.
These aren't entirely uncommon in real estate deals. Party A needs some money for some part of the deal, but Party B isn't supposed to pay for that. Party B hands Party A a check, possibly while the real estate lawyer is out of the room making copies or something. It's cute.
I was really surprised by that when my friend bought his house. It's a sneaky way to get around the fact that the bank won't finance anything that's not secured by the house. So say you are buying a house for 200k, but after the down payment, you don't have the money to redo the kitchen like you wanted. No problem, the seller adds 3k to closing costs and hands you a check for 3k. Your bank hands you a check for 203k, You pay the seller, and suddenly you have 3k that your bank wouldn't finance directly to redo your kitchen.
But I have an impression that "wiggle-room" contracts are not scaleable, when you need to have the same contract with multiple parties with a significant chance of having an "adversary" among them.
(lawyer here, but i don't make a living at it so i have no care :P)
Empirically, they are in fact scalable.
The number of contracts litigated in the situation you are talking, as a percentage of overall contracts in those situations, is ridiculously small.
(choose any metric, in fact, and you'll see they've scaled just fine)
Meanwhile, the thinking you are espousing turns out to be pretty much impossible in practice even if you wanted it to be so. I get the desire by engineers, and even the desire in some forms of contracts. But in the general case, in fact, it makes it much much worse than we have now. In one case, you have a judge looking at the spirit of the contract and making some reasonable decision about what should happen.
In the other, you have to have completed the often impossible task of thinking and codifying every edge case and possibility. If you get it wrong, too bad, so sad.
I know which i'd want.
One of the reasons we have judges in the first place is because the desire to codify all possibilities is not achievable. It's not a thing we sanely have achieved in thousands of years of law, contracts, etc.
The idea that because we are now expressing it in a bytecoded language and not words, it will suddenly become possible to achieve, seems incredibly wrong headed, because the language was never the problem.
The contracts you can effectively express this way were never a problem from the language perspective. It definitely makes them more automatic, but making these contracts more automatic is basically "meh" on the innovation scale[1].
[1] Though i'm not crazy and certainly believe there are many many billions of dollars to be had in doing this.
Human judges verifying the data for outcome seems akin to proof reading. If computers get more advanced, less "proof reading" is needed. It seems like automating lawyer work will make society a more fair place, if you agree with me that more cases being brought up is better than no sue or settlement. Price could also go down this way.
I'm very curious if there'd be a different take on common law and civil law when it comes to AI. There's already an AI called NDA Lynn which checks whether an NDA is "fair" for you or not. Its essentially free if you're OK with your data becoming part of the ML base (if not it costs 45 EUR IIRC). [1] The person who made this is a lawyer and isn't afraid this type of tech will put lawyers out of business.
Reading Neal Stephenson's The Diamond Age currently, and it was apparent to me that Bud's hearing was all done by humans, and a judge. It seemed to me that it was just that it was crystal clear that he was guilty that the verdict was cast so quickly? Or did I miss something?
>It definitely makes them more automatic, but making these contracts more automatic is basically "meh" on the innovation scale.
I don't know, sufficient automation allows for millions of contracts a second, all automatically generated, many relying on layers and layers of hundreds of other automated contracts being executed in real-time.
That is, the difference could be as drastic as between computation algorithms for pen-and-paper, and the Internet as we know it now. Will it? No idea, but I think writing contract automation off as 'meh' is as shortsighted as thinking the Internet is basically a faster postal service that can't deliver packages.
An example of a contract in which it is useful have wiggle room is hiring a company to build a website for you. The best process for building a website necessarily includes discovery and continuous decision-making about what to build, so a long and prescriptive contract that spells out every product feature on day one will most likely result in a crappy final product and/or a ton of change orders and amendments.
Yes, it's possible to change contract language when the parties mutually agree. But in a company with any sort of process around contracts, it will be a pain in the ass to make lots of changes.
> An example of a contract in which it is useful have wiggle room is hiring a company to build a website for you. The best process for building a website necessarily includes discovery and continuous decision-making about what to build, so a long and prescriptive contract that spells out every product feature on day one will most likely result in a crappy final product and/or a ton of change orders and amendments.
The discussion seems to be about allowing wiggle room in an otherwise 'non-wiggly' contract, which doesn't seem to be the situation you're describing. Your suggestion clearly isn't that the long and prescriptive contract should be drawn up and then repeatedly amended, but presumably is rather that the initial contract itself should provide a mechanism for easy changes; and contracts enforced by technology, like any others, can be created in this way.
The other part is that contracts are built on civil trust, not technology. I don't think blockchain will ultimately be all that useful because it doesn't solve the trust problem.
That's true, but let's make it just slightly more complex: Our contract is to swap 10 EUR for whatever it is worth tomorrow in USD according to what "bloomberg.com" gives as the representative rate at 12:34pm.
Now, this is easily codified, but ...
a) Someone could hijack the "bloomberg dns"
b) Someone could hijack bloomberg's BGP
both the above would likely be defended by using https, but CAs have been hacked before, and there are questionable state controlled ones.
c) Someone could hack inside Bloomberg itself to give the wrong rate
d) Bloomberg might have a bug that is struck exactly at 12:34pm on that day, which shows the wrong rate.
All these 4 things may happen independently of our contract - Bloomberg is not a side to our agreement, and other actors might have reasons to try to make it give wrong data.
In "The real world", if the rate is really off (say, half what you expect), you'd look at Thomson/Reuters and Yahoo, realize Bloomberg is borked, and react accordingly - and a court would likely support that court of action.
This is the kind of wiggle room you want, because in the real world, it is impossible to lock down all of these improbable, weird, but possible, outcomes.
Contracts that are so simple that there's no potential need for wiggle room aren't very useful.
In real world contracts, the more money is involved, the more both sides try to protect themselves against such weirdness; and yet, courts are sometimes involved, either because interpretation is disputed (comparable to "code has underfined behaviour") or due to events not covered in the original contract.
Speak for yourself! If I am a party to a contract, I don't want the other party to be able to "wiggle" their way out, and I'd certainly give up my ability to in exchange. Especially given the American Rule [0], in a system where contracts can be disputed and modified, someone who has much more monetary and legal resources than I do can effectively force any change in the agreement (though a binding arbitration clause would ameliorate this).
There's an entire genre of stories about deals with the devil or supernatural items ("Monkey's Paw"), where the deal is binding - and the punishment is getting exactly what you asked for.
It seems to me that the set of useful contracts you can write that are completely unambiguous is very small.
Consider an employment contract on a blockchain.
There doesn’t seem to be any way to do this without relying extensively on oracles that reflect fuzzy human judgement about what the terms of the contract really mean, let alone whether certain actions took place, let alone whether those met or violated the terms.
Oracles seem to be a good solution. A lot of the time people just need some boilerplate to conduct a transaction and will need to refer back to the contract in the case of a dispute only. Contract as code allows us to naturally standardise on boilerplate for common cases whilst allowing for specialised code in specialised cases.
The 1% of contracts that are disputed could be conditionally successively escalated until human arbitration, settlement or a trial is reached. Oracle reports and contract executes accordingly.
Fair point, although it’s hard to see what value the smart contract is really adding in this case. The record keeping (what everyone decided) is better I guess. I’m not sure that there’s any (boilerplate) part of a standard employee agreement that could be evaluated on-chain.
Somewhat tangential objection, but AFAIK, the only “action” a smart contract can take is, effectively, to disburse funds.
It can’t force anyone to do anything, although it can pay people to do stuff if you fund it enough. You probably need more oracles and/or subcontracts to make sure they really do it though.
Anyway, doesn’t this mean we need to lock up enough funds to cover all eventualities ahead of time, for all contingencies of the contract? It seems like that could be millions of dollars. What if I lose my arm in a bandsaw and the company was directly responsible?
> Fair point, although it’s hard to see what value the smart contract is really adding in this case.
In the 99% case, it allows us to transact whilst protected by contracts which pay out later as you mentioned.
> I’m not sure that there’s any (boilerplate) part of a standard employee agreement that could be evaluated on-chain.
"Employee was paid on time and in full" comes to mind.
> Anyway, doesn’t this mean we need to lock up enough funds to cover all eventualities ahead of time, for all contingencies of the contract? It seems like that could be millions of dollars. What if I lose my arm in a bandsaw and the company was directly responsible?
An interesting one. Presumably one would not sign a smart employment contract that was not tied to some kind of insurance token which covered employee claims?
Well, anything that relies on goods/services in the real world is going to be difficult by virtue of the fact that nodes aren't able to determine whether a good/service was really delivered. You could, however, get a rudimentary employment contract by keeping payments in an escrow account until the end of the month (or your employment is terminated early). This would prevent wage theft by the employer while also allowing an employee not to get paid for not doing their job, though it couldn't handle more complex clauses like penalizing violation of an NDA.
However, there are plenty of cases where the employment contract can consist of creating a digital object that solves a problem in NP (for instance, code that passes a randomized test suite), in which case the employment contract can exist completely on the blockchain.
Aside from the entertainment value of fixed-in-stone contracts, there is also the issue (touched on in the article) that the result would slow the economy drastically.
There is way too much "wiggle room" when you deal with multiple nationalities, different cultures, foreign languages, jurisdictions... The only thing that is rock solid and predictable is contract written in programming code.
But I am not saying that current implementations are best.
> The only thing that is rock solid and predictable is contract written in programming code.
The only code that's 'rock solid and predictable' is code that's been formally proven. Are smart contracts doing that?
Further, as described above, even if they were perfectly written every time, they'd still be a poor replacement for human law. We are squishy, imperfect and inconstant, we have legal protections and legal wiggle-room for a lot of reasons.
Only because the whole process is a lot of hassle and work for everyone involved, so it can be used with a primary purpose of chicanery rather than actually getting your legitimate claim.
If a lawsuit could be resolved quickly and fairly with little effort on both sides, I'm sure the limit for when it would be worth it would drop. I'd consider that a feature, not a bug.
In Truman Capote's history of a Kansas massacre, In Cold Blood, he mentions that purely fortuitously the father/husband of the murdered family had taken out a life insurance policy on himself a few days before. The insurance agent had accepted his check, but told him that the policy was not in force until the check cleared. At the time of the family was killed, the check had not yet cleared. The agent called his supervisor as soon as he heard the news about the murders and asked whether the insurer would pay. The supervisor said without hesitation, "Of course we will."
This to me is one of the finest examples of living the spirit of the contract, rather than wriggling off responsibilities because you can legally do so.
At the same time, I have to wonder how many insurers today would so quickly affirm their intention to pay in such a circumstance.
I would expect substantially every adjuster at every life insurance company in the United States to pay a claim for a life insurance policy which a non-specialist might think was bound but which was not factually bound yet given a death for any reason but suicide absent fairly clear indications of insurance fraud.
I realize technologists feel like insurance companies are malevolent entities, but they're a) highly regulated financial institutions b) staffed by professionals in risk management with c) significant exposure to negative public attention.
Additionally, every insurance regulator has Thou Shalt Not #)%( Around With Paying Out Life Insurance Claims as their #1 rule, principally for historical reasons.
Coming to the opposite intuition on this requires one to believe that, for an actuarially insignificant improvement in their loss rates so small as to be undetectable, insurance companies like jousting with regulators and the public while screaming "Catch me if you can, suckers!" (Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.)
>I realize technologists feel like insurance companies are malevolent entities,
No, it isn't that. I feel like every large company behaves almost always like a machine whose job is to print money, with no consideration to morals, ethics, or decency unless they believe the good PR from such will cause them to be able to print more money.
I believe this because it is how they (usually, not quite always of course) behave, as they are beholden to their investors to print money.
Interesting, given that health insurance is notorious for the opposite (failing to pay for things that the purchaser might resonably expect to be covered).
>(Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.)
Doesn't this undermine your point? Insurers were plenty happy to sit on life insurance payments and not even attempt to figure out who to pay them to, thus betraying what you state as their #1 rule and jousting with regulators and the public over actuarially insignificant improvements in their loss rates.
In the UK a speeding driver struck and severely disabled an 8 year old boy. The driver's insurer sued the mother (really!) saying it was partly her fault for letting the boy go to the park under the supervision of his older cousins. Happily the judge found for the mother.
This kind of aspect is exactly why I'm fairly wary of smart contracts as a general concept.
The problem with "law is code" is that the entire functioning of society depends on law not being code. Think of how broken all software is, everywhere, all the time. Now multiply that by how messy the legal system already is.
While I was reading your comment I couldn't help myself thinking that, even though laws are not code, our society does run on code now and algorithms start reflecting the laws we chose and in fact, in some cases, pre-date the laws and in this sense effectively become the law until lawmakers or judges object. So I wonder in how far the question is not whether law is (will become) code or not but whether code will become law.
Side remark: I find it amusing and terrifying at the same time how Lessig distinguished between "the real world" and cyberspace, whereas nowaways these boundaries are a lot more blurry.
(the "decline tracking and go plain-text instead" link goes to the front page not the article requested, which in plain form does not make finding the target article easy as there is no search, list by date, or other such useful mechanism)
Generally, I'd agree. Contracts in big business aren't typically enforced by the letter. You sign a 5-year contract, with +1 year extensions up to 5 years, you aren't going to start enforcing things that don't really matter in the grand scheme of things.
Contracts are generally about reducing risk. Reducing the risk that you're going to steal my IP, and reducing your risk that I'm not going to pay you.
In saying that, I've seen some be enforced to the letter. So if you're a start-up, take your contracting seriously.
The Caesar's case that he mentions was an interesting case study, they totally tried to get away with it -- in that case it was the $450 million mistake.
There's an interesting intersection between "Money Stuff" (Matt Levine's newsletter) readers and HN participants. I often see Matt link to articles that were on the front page of HN the day before and often see front page HN articles that we're in Matt's links from his newsletter that morning.
Could be coincidence (interesting articles are interesting articles!) or a more closely linked feedback loop.
Not a coincidence -- he links to the OP's link in yesterday's column when discussing precisely that similar problem. It is likely how the OP found this older article; I know I read it earlier today due to Matt's link.
Commercial motivations matter — smart parties try to play fair, because they realize they're likely to have to deal with the other side again, and because at some point they're likely to need a break themselves, whether from the other side or from some other party.
That's especially true in garden-variety commercial contracts: Suppliers want repeat business, while customers want reliable suppliers who will go the extra mile when necessary, e.g., in a crunch. Neither of those is likely if you get a reputation as uncooperative.
The nut graf of the NPR piece is this: "Business may be a game, Levine realized, but it's not a one-time game. It's more like an infinite game. It's a game in which people have to live with each other, work with each other again, and perhaps, write another big contract. ¶ The only time the words in a contract really matter, Levine says, is when things start to get ugly — like when people start suing each other."
> Update: There was a typo in the original post -- the word "word" was misspelled as "world." Thank you to the commenters for bringing it to our attention.
This is also a dark pattern by NPR. It is nice to have a plaintext version available, but
1. The "DECLINE AND VISIT PLAIN TEXT SITE" button does not go to the text version of the article, and you have to actually figure out that the id is part of the url to find the article.
2. The only alternative to all the sharing of personal information is heavily degraded - there might be multimedia that is part of the article that is actually necessary for it. This is probably a violation of GDPR Art. 7. part 4.
I'd sure love to see the EU try and assert extraterritorial jurisdiction over an American organization publishing news explicitly intended for American audiences...
Fair enough, although I suspect someone just figured (basic) compliance was less expensive than litigation. Either way, I bristle at the idea that EU law applies to NPR's main site. That's like saying the U.S. Congress can require things of bbc.co.uk
I don't think there's anything missing here. I actually really appreciate the brevity. It's a small, informative, and relatively humorous anecdote that knows what it is, no frills included.
I agree, just something I'm not used to seeing on the internet, I felt like it was just getting into it, and then it was over, and I start to wonder how it became an article in the first place...
Modern long-form articles online are legally required to cut away in the 3rd paragraph to a story about the protagonist's upbringing, then go back to the main story for 4 paragraphs, then 3 paragraphs about the protagonist's parents (or, grandparents if they're Japanese) before returning to the main story for a paragraph or two, which must end by teasing the headline again. Just when the article gets actually informative, the article must tell you about a competing politician/businessman/musician/whatever, which will surprisingly end with an warm endorsement of our protagonist. The article must then on some choice quote, and leave you somewhat surprised you read it all the way through.
Also note that this is a transcript of a segment on the radio program “All Things Considered.” Typically their stories are in the 3 to 5 minute range, just as this story is. The format probably makes more sense for radio than it does for web.
"The Evolution of Cooperation" by Robert Axelrod is a great book that basically makes the case that cooperation is rational as long as there is the promise of more interaction in the future.
> Business may be a game, Levine realized, but it's not a one-time game. It's more like an infinite game. It's a game in which people have to live with each other, work with each other again, and perhaps, write another big contract.
In technical terms, it can be modeled as an iterated prisoner's dilemma [1]. In a regular one-off prisoner's dilemma, it always makes sense for both players to defect, as does in an iterated PD with a set number of rounds, known to both players. That is the only Nash equilibrium. But in an iterated PD where the number of rounds is unknown in advance, more cooperative strategies can be superior.
>Business may be a game, Levine realized, but it's not a one-time game. It's more like an infinite game. It's a game in which people have to live with each other, work with each other again, and perhaps, write another big contract.
In other words, it's an iterated prisoner's dilemma, not a one-off. Success is determined by your skill at playing the meta-game, the set of all games, moreso than your ability to crush your opponent mercilessly in every individual game. See https://ncase.me/trust/
There seems to have been a failure in the review process at the client. In the contracts that I have been involved in, there is always a business person/accountant that reviews the contracts for the business terms.
> Update: There was a typo in the original post -- the word "word" was misspelled as "world." Thank you to the commenters for bringing it to our attention.
How appropriate. :) I'm trying to come up with a phrase where this typo could mean all the difference.
"From any country found in the wor(l)d scuba equipment may be imported."
You can import equipment from Cuba.
Not a great example as it needs bad punctuation; and it's the name of the country that's in the word "scuba".
Most uses like "imports from anywhere in the Word will be taxed at the rate given in regulations issued by ..." will be nonsensical if taken literally and so wouldn't have any power unless apparent intent was considered.
That's the problem with corporations getting bigger; because executives make huge deals all the time, they forget the true value of money (from the perspective of the majority of the population) and they become inefficient in how they spend it... To the point that they can just round off $25 million.
