At the AI's discretion

Legal implications of AI exercising a contractual discretion to prevent sales

Where a contract confers a discretion on one party that materially affects the rights of its counterparty,  the discretion must be exercised rationally. The Supreme Court held in Braganza v BP Shipping Ltd [2015] UKSC 17 that exercising a discretion rationally involves (i) taking the right things (and only the right things) into account, and (ii) avoiding a decision that no reasonable decision-maker could have reached. In this episode, we explore how those principles might operate in the context of a discretion exercised automatically by a machine learning algorithm. We do so in the context of a fraud detection algorithm and an online farmers' market somewhere in East Anglia.

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(c) 2020, Matthew Lavy & Iain Munro