Towards electronic contract performance

An increasing volume of research in e-commerce is concerned with the development of tools and environments to support various aspects of business-to-business electronic contract formation and performance. This paper is mainly concerned with the latter and takes up the suggestion that automated execution of an agreement between (at least) two parties can be effected through a central control mechanism (a so-called e-marketplace). We revisit modal action logic to model an agreement as a state-based system and specify acceptable and unacceptable states of a business transaction. Unacceptable states result from violations of contractual obligations or prohibitions and call for appropriate recovery mechanisms to be specified, so that they can be enforced by the central control mechanism. We comment on the relations between contract violations and the concepts of fault tolerance and recovery arising in the broader distributed systems context, on the one hand, and contrary-to-duty structures from the (theoretical) deontic logic perspective, on the other.