From Legal Contracts to Formal Specifications: A Progress Report

SN Computer Science, 2022

The opportunity to automate and monitor the execution of legal contracts is gaining increasing interest in Business and Academia, thanks to the advent of smart contracts, blockchain technologies, and the Internet of Things. A critical issue in developing smart contract systems is the formalization of legal contracts, which are traditionally expressed in natural language with all the pitfalls that this entails. This paper presents a systematic literature review of papers for the main steps related to the transformation of a legal contract expressed in natural language into a formal specification. Key research studies have been identified, classified, and analyzed according to a four-step transformation process: (a) structural and semantic annotation to identify legal concepts in text, (b) identification of relationships among concepts, (c) contract domain modeling, and (d) generation of a formal specification. Each one of these steps poses serious research challenges that have been the subject of research for decades. The systematic review offers an overview of the most relevant research efforts undertaken to address each step and identifies promising approaches, best practices, and existing gaps in the literature.

Cornell University - arXiv, 2022

A Smart Legal Contract (SLC) is a specialized digital agreement that consists of natural language and computable components. The Accord Project is an open-source SLC framework containing three main modules: Cicero, Concerto, and Ergo. Currently, we need lawyers, programmers, and clients to work together with a great deal of effort to create a useable SLC using the Accord Project. This paper proposes a pipeline to automate the SLC creation process with several NLP models to convert law contracts to the Accord Project's SLC format. We then further describe an interface enabling users to build their SLC with the proposed pipeline.

ArXiv, 2021

We present a smart legal contract platform to support a wide range of smart legal contract use cases. We see this as a step towards improving existing approaches to representing the complexity of legal agreements and executing aspects of these agreements. The smart contract is a coded computer program that will automatically execute when something triggers it. In contrast, the smart legal contract is a legal agreement in digital and executable code that connects terms and can interact with other software systems. Clack et al. (2016) provides an encompassing definition of smart contract and smart legal contract by considering the operational aspect and legal focus of both while basing the definition in the topics of automation and enforceability: “A smart contract is an automatable and enforceable agreement. Automatable by computer, although some parts may require human input and control. Enforceable either by legal enforcement of rights and obligations or via tamper-proof execution ...

Informatics, 2022

The aim of the research is to semi-automate the process of generating formal specifications from legal contracts in natural language text form. Towards this end, the paper presents a tool, named ContrattoA, that semi-automatically conducts semantic annotation of legal contract text using an ontology for legal contracts. ContrattoA was developed through two iterations where lexical patterns were defined for legal concepts and their effectiveness was evaluated with experiments. The first iteration was based on a handful of sample contracts and resulted in defining lexical patterns for recognizing concepts in the ontology; these were evaluated with an empirical study where one group of subjects was asked to annotate legal text manually, while a second group edited the annotations generated by ContrattoA. The second iteration focused on the lexical patterns for the core contract concepts of obligation and power where results of the first iteration were mixed. On the basis of an extended set of sample contracts, new lexical patterns were derived and those were shown to substantially improve the performance of ContrattoA, nearing in quality the performance of experts. The experiments suggest that good quality annotations can be generated for a broad range of contracts with minor refinements to the lexical patterns.

Grail of Science

This paper considers the smart contracts development process based on business rules using natural language processing as the research object. The research subject includes software components for creating smart contracts based on business rules using natural language processing. The research aims to simplify the software component development for decentralized systems by using smart contracts generation from business rules written in natural language. This study considers smart contract development approaches and technologies, intelligent text processing methods, as well as software development techniques using the Python programming language for the experimental implementation of the proposed solution. This study outlines the relevance of this research, provides a state-of-the-art analysis, proposes the improved procedure of smart contracts’ development and deployment, and suggests an algorithm for smart contract generation based on business rules.

Lecture Notes in Computer Science, 2010

Controlled natural languages have been used to enable the direct translation from natural language specifications into a formal description. In this paper we make a case for such an approach to write contracts, and translating into a temporal deontic logic. Combining both temporal behaviour and deontic behaviour is challenging both from a natural language and a formal logic perspective. We present both a logic and a controlled natural language and outline how the two can be linked.

IEEE Access

Blockchain-and smart-contract technology enhance the effectiveness and automation of business processes. The rising interest in the development of decentralized autonomous organizations (DAO) shows that blockchain technology has the potential to reform business and society. A DAO is an organization wherein business rules are encoded in smart-contract programs that are executed when specified rules are met. The contractual-and business semantics are sine qua non for drafting a legally-binding smart contract in DAO collaborations. Several smart-contract languages (SCLs) exist, such as SPESC, or Symboleo to specify a legally-binding contract. However, their primary focus is on designing and developing smart contracts with the cooperation of IT-and non-IT users. Therefore, this paper fills a gap in the state of the art by specifying a smart-legal-contract markup language (SLCML) for legal-and business constructs to draft a legally-binding DAO. To achieve the paper objective, we first present a formal SCL ontology to describe the legal-and business semantics of a DAO. Secondly, we translate the SCL ontology into SLCML, for which we present the XML schema definition. We demonstrate and evaluate our SLCML language through the specification of a real life-inspired Sale-of-Goods contract. Finally, the SLCML use-case code is translated into Solidity to demonstrate its feasibility for blockchain platform implementations.

Electronic Proceedings in Theoretical Computer Science, 2011

In this paper we present a framework to analyze conflicts of contracts written in structured English. A contract that has manually been rewritten in a structured English is automatically translated into a formal language using the Grammatical Framework (GF). In particular we use the contract language C L as a target formal language for this translation. In our framework C L specifications could then be input into the tool CLAN to detect the presence of conflicts (whether there are contradictory obligations, permissions, and prohibitions. We also use GF to get a version in (restricted) English of C L formulae. We discuss the implementation of such a framework.

International Journal of Cooperative Information Systems, 2006

This paper presents a formal system for reasoning about violations of obligations in contracts. The system is based on the formalism for the representation of contrary-to-duty obligations. These are the obligations that take place when other obligations are violated as typically applied to penalties in contracts. The paper shows how this formalism can be mapped onto the key policy concepts of a contract specification language, called Business Contract Language (BCL), previously developed to express contract conditions for run time contract monitoring. The aim of this mapping is to establish a formal underpinning for this key subset of BCL.

Proceedings of the 35th Annual Hawaii International Conference on System Sciences, 2002

Currently a number of these on-line support systems for electronic contracting are under development. In this paper we develop a logical formalism to represent the content of business contracts. This formalism can be used to develop applications that can automatically negotiate and process contracts, or it can be used to develop online help systems that explain to the human negotiator what for him the implications are of a certain contract that is proposed to him by the counter-party. The formalism we develop is based upon recent developments in the field of the Formal Language for Business Communication (FLBC) and event semantics. In the paper we show how many key constructs of the content of business contracts can be modeled using event semantics. We also show that the formalism can be implemented in Prolog.