Machines Make Mistakes Too: Planning for AI Liability in Contracting

Recent advances in artificial intelligence have set off a frenzy of commercial activity, with companies fearful that they may fall behind if they are unable to quickly incorporate the new technology into their products or their internal processes. At the same time, numerous scholars from the machine learning community have warned of the fundamental risks that uninhibited use of artificial intelligence poses to society. The question is not whether artificial intelligence will cause harm, but when, and how. The certainty of future harm necessitates that legal scholars and practitioners examine the liability implications of artificial intelligence. While this topic has been given increasing focus in the literature, such discussion is lacking in two key ways. First, there has been little attempt to consolidate the literature on the range of legal theories that might apply to harm resulting from the use of artificial intelligence. Second, the literature has failed to address the role that contracting may play in reducing uncertainty around liability and overriding common law approaches. This paper addresses both gaps in the literature and provides legal practitioners with an overview of key considerations related to liability allocation when contracting for artificial intelligence technology. Part I of the paper begins by briefly discussing the risks inherent in the use of artificial intelligence, including in particular risks resulting from a lack of transparency and explainability, and the harms that might result. Part II of the paper distills past legal scholarship on the legal theories that might apply when harm results from the use of artificial intelligence. The theories analyzed include vicarious liability, products liability and negligence. Relevant distinctions between artificial intelligence and software are discussed as they relate to the application of products liability and negligence theories in particular. Part II closes by highlighting that the current uncertainty in the legal landscape for artificial intelligence liability incentivizes contracting parties to address liability directly within their contracts. Part III of the paper then proceeds to provide an overview of important considerations for contracting parties when using contractual apportionment of liability to reduce uncertainty around harm resulting from the use of artificial intelligence. These considerations are organized by contracting phase and by relevant contracting section

Clashing Policies or Confusing Precedents: The Gross Negligence Exception to Consequential Damages Disclaimers

Consequential damages can easily amount to millions of dollars. Commercial parties often disclaim consequential damages in their contracts. This Article posits that such disclaimers between commercial parties under the Uniform Commercial Code (UCC) should not be found unenforceable based on gross negligence. Article 2 of the UCC promotes the policy of freedom of contract. Consistent with that policy, section 2-719 of the UCC provides that contractual consequential damages disclaimers should be enforceable absent a finding of unconscionability. This Article analyzes the interplay among UCC section 2-719, “public policy” exceptions to enforcing limitations of liability, and the law of gross negligence. This Article concludes that but for those rare circumstances in which a commercial buyer may invoke unconscionability, courts should uphold consequential damages disclaimers absent a clear showing of willful misconduct. This standard provides a more discernible “bright-line” that comports with the general treatment of economic losses under the UCC

Evaluation of construction contract documents to be applied in modular construction focusing ambiguities; A text processing approach

Modular coordination in building construction has become increasingly popular, particularly in Northern Europe and North America. In Canada, modular construction came to considerable attention over the last decade due to its valuable effect on project constraints, safety, and preventing construction and demolition waste. However, the modular construction industry still adopts the same administrative procedures designed for the conventional construction industry, even though the features of modular and conventional construction are different in terms of construction processes and methods. Due to this trend, ambiguities in administrative documents are widely occurred and are one of the main causes to generate conflict, disputes, and claims between owners and modular suppliers as general contractors. As a first step in the this research to overcome this challenge, the research team focuses on investigating the contents and structures of the current standard contracts and modular RFPs, which are one of the major sources of confusion in modular construction, in order to mitigate and/or remove the ambiguities based on the considering the specifications of off-site construction procedures and system. In this case, this research illustrates a conceptual framework that has two parts: First, classification of the main sources of ambiguities in construction contracts (both Conventional and modular) and second, to identify the similarities and differences between Canadian documents (standard contracts and modular RFPs) and benchmark countries by applying through text processing and readability analysis. We applied text processing to find top terms, including terms with high frequency (TF) in each document, also high TF-IDF terms, which species occur in one document and not others then, we detected manually the three standard contracts and four RFPs and compare them with the output of literature review to identify the major issues that are common. The readability analysis shows the textual complexity of a document and to what extent the documents are difficult to read. The main findings indicate that the modular industry in Canada suffers from a lack of specific standard contract documents for modular construction

Service triads:a research agenda for buyer–supplier–customer triads in business services

Service triads, in which a buyer contracts with a supplier to deliver services directly to the buyer's customer, represent an emerging business model. This special issue is dedicated to this theme. To set the context, in this lead article, we first define service triads, both as a phenomenon and a research topic. We then provide a review of different strands of existing research and various theoretical frameworks that can inform our study of service triads. This culminates in an outline of a research agenda that can guide future study. As such, this paper not only introduces the articles in the special issue, but is also intended as a point of reference and motivation for further work on service triads, and on triads in general

Transportation Risk Management Approach in a food company: A Business Continuity Plan

Transportation is an essential aspect to fast-moving consumer goods supply chains. The risks associated with transport operations are of great concern when trying to ensure business continuity of a company. The dissertation is based on the Distribution & Export Business Unit at Kraft Heinz inter-national, which ships to over 25 countries in Eastern Europe, and also to the US and Israel. The complex logistics system that goes into planning transportation for so many countries makes it so that risks within transportation are highly present. The main identified issue at the case study organization was the lack of a structured approach towards transportation risk manage-ment. Most of the contingency measures applied by the company to act on these risks are of a reactive nature instead of proactive. The goal of this research is to create such structured approach towards risk management. To achieve this goal, transportation risks were mapped within the company through semi-structured interviews with employees working in supply chain operations. Additionally, current literature was analyzed and later compared with the interview findings to learn possible strategies and solutions to manage transportation risks. Finally, the gathered knowledge was used to propose a Business Continuity Plan based, which provides insights on how to assess and prepare for current and future transportation risks. The main findings and proposed guidelines for transportation risk management relied on shifting the company's work culture from cost to consumer oriented, increasing communi-cation flows throughout the supply chain with help of cross-functional integration and stand-ardizing the way the case study organization identifies, evaluates, and acts upon transportation risks, as well as actions that can be integrated into supply chain operations, such as assessing risk key performance indicators, determining ownership of tasks and spreading awareness of transportation risks throughout the supply chain.Os transportes são um aspeto essencial nas cadeias de abastecimento de bens de consumo rápido. Os riscos associados às suas operações são de grande preocupação para as empresas que querem garantir continuidade de negócio. O estudo baseia-se na Distribution & Export Business Unit da Kraft Heinz International, que exporta para mais de 25 países na Europa Oriental, e também Estados Unidos e Israel. A complexidade da logística envolvida em exportar para tantos países diferentes leva a que a sua cadeia de abastecimento esteja altamente exposta a riscos de transporte. O principal problema identificado na empresa estudo de caso foi de não terem uma abordagem estruturada para gerir os riscos no transporte dos produtos. A maioria das medidas realizadas pela empresa, para atenuar esses riscos, têm sido de natureza reativa em vez de proativa. O objetivo deste estudo é a criação de um plano estruturado para gestão de riscos, de modo a melhorar a preparação da empresa relativamente a riscos de transporte. Com este objetivo, foram analisados os riscos de transporte da empresa estudo de caso através de entrevistas semiestruturadas com funcionários que trabalham nas operações da cadeia de abastecimento da empresa. Adicionalmente, foi analisada a literatura existente para ser posteriormente comparada com os resultados das entrevistas e concluir possíveis estratégias e soluções para a gestão de riscos. Os resultados foram utilizados para propor um Business Continuity Plan , que revela como a empresa se deve preparar para atuais e futuros riscos. As principais conclusões e diretrizes propostas para a gestão de risco, referem a necessidade de alterar a cultura da empresa de um foco em custos para um foco no cliente, melhorar as redes de comunicação em toda a cadeia de abastecimento com ajuda de uma equipa multifuncional ou equipa multidepartamental e standardizar a maneira como a empresa identifica, avalia, e age sobre possíveis riscos de transporte, bem como ações que podem ser integradas nas operações da cadeia de abastecimento, como a avaliação através de key performance indicators para riscos, definir responsabilidades e espalhar conhecimento sobre riscos de transportação por toda a cadeia de abastecimentos

Lessons Learned and Next Steps in Energy Efficiency Measurement and Attribution: Energy Savings, Net to Gross, Non-Energy Benefits, and Persistence of Energy Efficiency Behavior

This white paper examines four topics addressing evaluation, measurement, and attribution of direct and indirect effects to energy efficiency and behavioral programs: Estimates of program savings (gross); Net savings derivation through free ridership / net to gross analyses; Indirect non-energy benefits / impacts (e.g., comfort, convenience, emissions, jobs); and, Persistence of savings

Energy applications: Enabling energy services

The energy services industry is not only misunderstood due to its diversity of value propositions, it has also been largely ignored as a major short term means of tackling climate change, ensuring energy supply security, and mitigating against rising energy costs (the three typical national energy policy goals frequently quoted around the world). Private sector business models have not been sufficiently identified, designed, incorporated, and evolved to meet the enormous opportunity that exists. The motivation for this thesis is therefore to design a highly effective business model that will make rapid inroads into the energy services industry, based on a deep understanding of its history, inherent market failures and institutional barriers, and critical success factors. This study set out to establish the range of existing business models in the energy services sector, and to explain the current and likely future market trajectories of its component parts, being, the energy efficiency, renewable microgeneration, carbon management, and smart energy management sub-industries, by conducting a literature review of thirteen high profile studies and interviewing multiple participants across the industry. The thesis also undertakes a thorough data analysis of the UK energy services market, quantifying its investment potential up until 2020 by developing individual growth models for each sub-industry. Five broad categories of energy services business models were identified including Utility Service Companies, Original Equipment Manufacturers, Energy Service Providers, Energy Service Companies, and Integrated Developers, which can be further broken down, proving that supply side fragmentation is severe. The data analysis concluded that an immediate total addressable market of £106.8 billion exists for a well constructed business which adequately combines the skills needed to operate across the four energy services sub-industries. The structure, resources, and value proposition of this business are set out in the enclosed business plan for a new company called Energy Applications

Adapting Private Law for Climate Change Adaptation

The private law of torts, property, and contracts will and should play an important role in resolving disputes regarding how private individuals and entities respond to and manage the harms of climate change that cannot be avoided through mitigation (known in climate change policy dialogue as “adaptation”). While adaptation is commonly presented as a problem needing legislative solutions, this Article presents a novel and overdue case for private law to take climate adaptation seriously. To date, the role of private law is a significant blind spot in scholarly discussions of climate adaptation. Litigation invoking common-law doctrines in climate adaption disputes has not yet taken off the way that the wave of high-profile lawsuits against sources of emissions causing climate change has, but it is inevitable that it will, making it ripe for attention in legal scholarship. The Article begins in Part I by highlighting several features of climate change and adaptation that will place inevitable disruptive pressure on existing doctrines and principles of private law. The new normal of climate change questions some key factual predicates embedded in private law doctrine. For example, climate change is radically moving the long-stable upper and lower extremes of multiple biophysical conditions (what scientists call “nonstationarity”), meaning individuals increasingly will be unable to accurately predict the future based entirely on past data (what scientists call the “no-analog future”). Private law nonetheless must operate in a manner that provides practical and meaningful guidance to stakeholders, which will require it to confront the new realities presented by climate adaptation, including how private individuals and entities can no longer predict the future in the same ways that they have in the past. In Part II, the Article identifies a series of evaluative guideposts to help assess when changes to doctrines and principles of private law may be needed to address impending climate adaptation disputes. Private law’s basic architecture helps to define and manage relationships, clarify responsibilities, and provide remedies for harm-—a tripartite framework we use in Part III to unravel a few key doctrinal pressure points that private law faces as it addresses a novel set of impending climate change adaptation claims. The principle of foreseeability-—central to numerous doctrines that define relationships, responsibilities, and remedies across tort, property, and contract law-—is likely to face some of the strongest pushback as we confront climate adaptation. We propose a “foreseeability of nonstationarity” principle and evaluate what that might mean for some core private law doctrines. This points towards expansion of the scope of obligations private law recognizes for various actors within their adaptation footprints. Existing private law principles can address wrongfulness even in the no-analog future of climate adaptation. It is important, however, that private law defenses recognize the nonstationarity of climate risks, as well as the lack of an analog future available to predict and address the harmful effects of climate change. We conclude that private law can and will adapt to climate change. This process will be central to providing guidance as individuals, businesses, and other private actors confront new risks and harms as society adapts to a new natural world. But the path of private law’s adaption matters, and how it approaches key principles such as foreseeability will be central to its capacity to provide meaningful guidance for private stakeholders adapting to the realities of climate change