Laskentatoimen ja rahoituksen yksikkö, 2019
The legal environment has experienced change in the form of not only globalization but the development of technology. While the concept of representations and warranties clauses has migrated from common law countries to civil law countries, concurrently the new capabilities of machines have been taken into use through the development of legal technology. This thesis aims to understand the relationship between these new movements. The research question of the thesis is: What is the relationship between artificial intelligence based legal technology and the representations and warranties clause as understood under Finnish contract law?
Very little research has been done on single contract clauses or the effects of legal technology. This thesis focuses on key concepts such as artificial intelligence and machine learning to form a basis for understanding the parameters of legal technology’s capabilities and limits both now and in the future. To gain insight into the nature of the representations and warranties clause, this thesis looks into concepts such as standard clauses, the loyalty obligation and liability limitations. This thesis deviates from the standard method of legal dogmatics and aims to reach conclusions with a reversed method. This thesis processes the single contract clause as it is used in practice and only then attaches legal concepts to it. The sources used in the thesis are mainly well-known pieces of literature in Finland, because sources on either part of the research problem are scarce.
The thesis’ key observations were that the representations and warranties clause is multi-faceted with existing arguments for and against it being a standard clause by nature, it being tied to the loyalty obligation and its use for liability limitations. In parallel it was found that legal technology, especially contract lifecycle management tools, are not yet at a level that users could really benefit from. This thesis concludes that the ambiguous nature and in casu evaluation of the representations and warranties clause affects the use of legal technology in drafting such clauses, in both positive and negative ways.
legal technology, representations and warranties, standard clause