Contracts, laws, policies and other forms of theft through words

Contractual agreements are an integral part of human activities. We make thousands of simple (and sometimes implicit) contractual agreements over the course of our lives. Most of us have extracted promises to do household chores from our children … in return for a weekly allowance or a special treat. Such simple contracts will be around in much the same form as long as we have families.

But formal agreements — in the form of insurance policies, laws and regulations, and many other types of contracts — have risen to new levels of complexity, and natural language has not risen to respond to the very real need for dealing directly with that complexity. Even expensive, trained intermediaries like lawyers cannot reliably and consistently interpret contracts and laws. You need only take a look at the decisions of the Supreme Court to confirm that.

And, increasingly, the fog of words is employed as a method of extracting value from us.

Paying to be abused

This morning I received notification that one of my online services had been renewed for a year and my credit card had been charged a non-trivial sum for that renewal. I had not ordered the renewal. In fact, I had been deliberately allowing that service to expire.

This wasn’t a scam. Well, at least not in the sense of a third party stealing money from me. The service provider itself legally renewed my service and legally billed me for it — in spite of my intent to discontinue that service by neglecting to renew it.

The service provider’s right to do so was all in the official service agreement … whose terms and conditions I had agreed to. I’m reasonably sure that I agreed to those terms and conditions. I’m pretty sure it was one of those boxes you have to check as you go through the process of buying such services.

Except that …

  1. I have no way of knowing whether the service agreement I agreed to several years ago was the same as the current service agreement.
  2. I was never notified — as in previous years — that my services were expiring and that I needed to renew them. This was a big change in policies.
  3. Neither of those first two points matter, because the current service agreement says the online service provider can change policies at any point without notifying me and that implementation of those policies is at their sole discretion.

Extraordinary. Even more extraordinary is that I was paying them to provide me with services and that I had to agree explicitly that I understood that service agreement … and implicitly that I was responsible for correctly interpreting a 30,000-word document about our agreement (a document that was not easy to find) … and that I might be penalized for not understanding that document.

We are losing the war of words

“Increased complexity may be attractive to issuers [of credit cards], as it allows them to hide the true cost of the credit card in a multidimensional pricing maze.”
― Oren Bar-Gill, Seduction by Contract: Law, Economics, and Psychology in Consumer Markets

The complexity of most agreements in today’s world is mostly unintentional. Things are just becoming more complicated, and the documents that describe those things reflect that complexity. But in many cases, deliberate obfuscation is the culprit. The quote above indicates that using information to hide legal or contractual obligations is sometimes a conscious business strategy, and I believe that such practices are widespread.

Even the lawyers we employ as intermediaries cannot successfully provide consistent interpretations of the flood of documents to which we are exposed. That’s unfortunate, because lawyers are the assumed guardians of truth in law and contracts. But the notion that legal language is precise is a myth. (And the notion that courts will interpret legal pleadings in a consistent way because laws and contracts are stated precisely is also demonstrably untrue.)

More often than not, such documents are just a distraction. For example, if you have ever sat in on the closing of the sale of a house, you know that the lawyers (or their para-legal surrogates) do not read the documents that constitute the legal foundation of the sale. The lawyer may know that such a transaction may require a specific set of documents, but it is highly unlikely that the lawyer will actually read those documents.

What’s more, we are frequently denied services or even accused of falsely (or, at minimum, incorrectly) claiming rights or benefits because we did not provide complete, correct, and timely information. In practice, that is often impossible because the requirements for providing correct information or taking specific action are confusing, incomplete, imprecise, or (knowingly or unknowingly) buried in the avalanche of information we receive.

I believe that unethical companies depend on such obfuscation as a means of minimizing their responsibilities and expenses — just as merchants depend on gift cards being lost, left unused, or expiring (a huge windfall for them).

How do we move forward?

Ironically, we pay companies, government organizations, and individual people to conduct war on our legal rights and contractual obligations. That big package of documents from health insurance companies you receive when you move to Medicare Part B cost them millions of dollars to produce. I’m not talking about printing and shipping costs. Thousands of hours of legal work went into the careful phrasing of the policies. And yet we are responsible for interpreting that information correctly.

It doesn’t make sense. Why aren’t the people and organizations we pay to provide us with services and products responsible for describing the rights of the parties in our agreements precisely? For connecting responsibilities of the parties explicitly and unambiguously to the implications and consequences of those responsibilities? For updating changes to those agreements and making us aware immediately of the changes affecting us as individual parties to their agreements?

All the information they need to do so is readily available to them. (It is not readily available to us.) And with the right model for representation of meaning, software applications can easily be developed to implement the functionality described in this blog. Parties to a complex agreement could even specify the meaning of agreements between them unambiguously — in detail — and connect those detailed representations to our specific, individual circumstances … if they chose to do so.

Instead, many businesses (and some government entities) conduct a continuous war of words on our rights and obligations.

I doubt that we could legislate a sweeping requirement to force businesses to provide us with precise, computer-supported representations of our obligations or responsibilities when we pay for a complex service or product. In fact, I think we should not attempt to do so. Instead, let the marketplace do its work. Favor those businesses that provide you with precise understandings of your agreements with them, precise representations of rights and responsibilities that are integrated with understandings of who you are. (The service provider I mentioned at the beginning of this post did politely agree to cancel the unwanted renewal of service and refund the money I was charged for that renewal. The spectre of howls in the marketplace about customer dissatisfaction are a powerful defense weapon. But I had to initiate that conversation.)

As we develop technology and services for this purpose, we must be careful not to reward premature optimization of models, technology, and processes for representation of contractual obligations. Only when such models, processes, and technologies are well understood — through actual, widespread use — should government step in to control abuses. That will take years, but we will be rewarded for doing so.

And one of the outcomes will be that we will discover many new ways to tame complexity.

Formal representations of legal reasoning and related thinking

Do a search for “formal representation of” contract terms or policies or law. What I propose in this post is not a new idea. It is simply (Yes, simply!) one aspect of the inevitable transition from language to meaning as a means of counteracting complexity.

See, for example, “(Semi-)Automatic Translation of Legal Regulations to Formal Representations: Expanding the Horizon of EDA Applications,” by  Oliver Keszocze, Betina Keiner, Matthias Richter, Gottfried Antpohler, Robert Wille. The Abstract of that paper:

Caused by the challenges in the design of today’s hardware and software systems, tools for Electronic Design Automation (EDA) became impressively powerful. However, these accomplishments can also be exploited in other domains. In fact, the steps of formalizing and checking legal regulations shares many similarities with established EDA design steps. In this work, this is demonstrated by proposing the application of EDA tools in the domain of law processing. We propose a (semi-)automatic translation of real rules and regulations into a formal representation. Afterwards, we discuss how – similar to the hardware/software design – these formalization can be utilized in the respective domain.

However, I assert — and many others would agree — that such automated interpretations would have to be validated by domain experts.

[NOTE:  I want to omit from this conversation any consideration of computer-managed work interactions — especially in such applications as Winograd and Flores’ The Coordinator, a product well known in the domain of Computer-Supported Collaborative Work (CSCW). We can take lessons from The Coordinator and the Speech Act Theory on which it is largely based, but CSCW is not primarily concerned with precise description of obligations and their relationship to consequences in daily life, and The Coordinator, in particular, was the center of a rather heated debate.]

© Copyright 2017 Philip C. Murray

 

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