In our last post, we concluded that in order for smart-contract-based digital agreements to provide a meaningful alternative to traditional paper contracts, besides providing legal viability, they must deliver the following functionalities:

Accessibility, flexibility and control, interactivity, oversight and analysis

In order to accommodate for these features and to allow for truly “self-executing” contracts that can still be monitored and managed by humans, Agrello utilizes what is known as belief–desire–intention software models (or BDIs).

BDIs model autonomous intelligent agents on the basis of presumed beliefs, desires and intentions, enabling those agents to choose a course of action according to these presuppositions and changing rules that are set by the agents environment. In our case, the presumed beliefs, desires and intentions correspond to the goals of a contract party, e.g., renting an apartment, while the agent’s environment comprises contract terms, user and sensor input.

For each contract side, the Agrello system models an intelligent agent that is placed in charge of executing the party’s obligations, notifying them of tasks that require human involvement, and listing available courses of action permitted by contract terms, as well as their possible results. Additionally, a third agent is generated to govern the contract itself and to perform bilateral tasks, such as verifying the validity of submitted forms or performed actions.

To illustrate how this works, let us return to the rental agreement example we discussed in the last post.

Landlord John and lessee Mary want to form a rental agreement using the Agrello platform. After they complete a short session using the template wizard, the system provides a well-rated and localized contract template from a community repository.

After analyzing the contract terms, the system generates three intelligent agents — one for John, one for Mary and one to govern the agreement as a whole. John’s and Mary’s agents could, if you will, be regarded as their counselors, while the third one governing the contract occupies a position similar to that of a judge or an administrator.

As a first step, each of the parties’ agents scans the contract and extracts a series of actions that have to be performed by John and Mary. Mary, for example, would have to connect a blockchain wallet to her agent, while John’s agent sends him to take pictures of the apartment to document its current state. The pictures are then handed to Mary to be digitally signed.

At this stage, the contract agent ensures that a down payment can be withdrawn from Mary’s wallet and then instructs John’s agent to form a transfer of possession act, who then hands digitally signed copies to both parties. Once the transfer of possession is ratified, the contract agent notifies John’s agent that it’s time to hand keys to Mary.

John’s agent now checks whether this action can be automated or if it requires human involvement. If a smart lock can be detected, Mary is given exclusive access. In any other case, John’s agent notifies him that a physical key has to be delivered to Mary, who on her side is asked by John’s agent to verify the handover.

In the case that Mary’s agent detects that funds in her wallet won’t be sufficient to cover the upcoming rental payment, she is notified to deposit the required amount. Would she fail to do so in due time, John’s agent would jump in and present him with the options of imposing a fine for late payment or setting a new due date on which the penalty will come into action. After a period defined by the contract’s terms, John can instruct his agent to terminate the agreement, which would result in Mary being notified and her smart-lock access being revoked.

In the case of a legal dispute, both sides can request a digitally signed hardcopy of the agreement from the contract agent, including a timestamped list of all actions performed by the parties, along with met and breached obligations. The plaintiff’s agent can then automatically fill and submit the required forms, initiating a lawsuit. At court, the contract hardcopy can then eventually be presented to an actual judge.

By automating most functions that are normally performed by lawyers, the need for expensive legal personnel is, in this example, reduced to an absolute minimum. Representation in court would in many cases still require a human professional, but their job would be considerably easier with the objectively verifiable event log provided by the contract agent. The number of cases eventually ending up in court, however, would be expected to drop significantly due to the clarity and consensus provided by the Agrello system.

If you want to learn more about Agrello, you’re always invited to join us on Slack or Telegram. Our team members will be glad to answer all your questions.

If you’re interested in participating in Agrello’s upcoming Token Sale, please visit us here.

Alexander Norta PhD — Chief Scientist of Agrello

Hando Rand — Project Lead of Agrello