For the reasons set out in the IACCM Contract Principles, the contract forms and clauses at CommonAccord are intended to provide a base for contracting among parties. In addition, these materials are made available in the way of open source software, which allows easy sharing and improvement.

There are many perspectives from which to approach contract standards. The IACCM Contract Principles approach standards from the perspective of refining and defining basic contracting ideas.  Analytic software approaches standards by finding common denominators in collections of actual contracts.  “Legal Design” approaches standards from the perspective of communication with users.  Model forms projects create complete solutions for sharply-defined uses.

The joining point of these efforts can be said to be an outline of the ideas and kinds of documents that express the ideas.  The outline:

  • should be organized to correspond to basic ideas;
  • have actual forms and clauses arranged on it, as in systems such as KM Standards and RAVN; and
  • be presented to the parties in a simple and compelling way that allows direct use and can be complemented with guidance and other aids to decision.

Such a shared system should “learn” — become better over time — from the experience of participants, the teachings of analytics and the interventions of experts.

The system should fit with two critical trends in IT:

  • “distributed access control,” such as UMA; and
  • “smart contracts.”

We suggest a starting point for the outline would be a list of some common contract types, each one populated with a list of common section headings …. (to be continued).

Eve Maler (@xmlgrrl) contemplating enterprise engagement with prose objects, wrote:

I would guess that making sure this system works would be a combination of a) suitably sophisticated and complex parameterization that meets real-world use cases and b) a “stack” of base prose that does right by individuals before it ever gets to organizations, but then (c) is still appealing to orgs and the corporate contract-editing tools they use.
That thought meets mine in the middle.
(c) Integration with Contract Management Systems:
The one thing the entire community (global, business, govt, advocacy, everybody) is missing is a way to codify legal.  So the clear win for all end-users (from Adrian’s autonomous patients to GE) is “prose objects” hosted and improved by collaboration on Github (and also published by IPFS or equivalent).  Use of publicly-available prose objects with clear “provenance” (@findthomas) will:
  1. accelerate negotiation via common starting points (see the purpose of IACCM Contract Principles introduction);
  2. give the clarity benefits of stable legal provisions (the basic function of legal “codification” and the great advantage of codified legal domains over uncodified domains);
  3. allows weaker, busier, less diligent parties to benefit from the sophistication and even the leverage of experts and peers.

Even sophisticated contract management systems (CRM) don’t cause general legal codification.  For organizations that are happy with their CRM, they might use prose objects “merely” as sources for legal text.  They might use them as legal forms, or might interface to them for more functionality.   Enterprises might find that they want to contribute to prose objects in order to influence the direction of legal standards.  They might do that by publishing prose objects on their own sites, or (better) by forking on Github, or (even better) through organizations such as the IACCM and legal groups.

(b) Individual Perspective:

While it is possible to address the problem of legal standards from the perspective of the individual, and ultimately a major impact will be (and should be) to empower the smaller actor (individual, company, country – almost all of us are small sometimes) it seems likely to me that the legal materials will originate from the more systemic partner.  For instance, the UMA Legal materials, the IACCM Contract Principles or the Y Combinator SAFE Notes.  It will be found that legal documents are not terribly complicated – despite the apparent endless variations and length.  The issues recur and improve with recursion.  The purpose of legal terms is to facilitate good behavior by both parties, to enable the relationship, to reduce the cost of inter-personal collaboration (Coase).  The smaller party will no longer be alone.

(a) Parameters
The choice of parameters is very important.  The easiest way to be sure to select parameters that cover the critical issues is to use existing forms – forms that persons (organizations) actually use.  “Accordifying” an existing form immediately pops-out the terms that the actors thought important.  Iteration will validate (or invalidate) their choices and find others.  The type-less model of CommonAccord, where all elements are parameters, means that we don’t get stuck with early choices.  Iteration will reveal the truth of what actors actually need.
For those organizations that directly use the prose object format for negotiation and signature, adoption leads to a true P2P data model, compatible with access-based approaches such as UMA and with GDPR and PSD2.
Eve adds:
“From Digital Currencies to Digital Finance: The Case for a Smart Financial Contract Standard.” Dr. Paolo Tasca, Journal of Risk Finance.
This excellent article uses the perspective of the blockchain movement to analyze a very complex conventional financial ecosystem: the management of financial contracts by banks and their suppliers.  It identifies major failings, notably gaps in the layers of management.  Because of the historic, organic development of separate transactional and analytical systems, there is a vast array of dissimilar systems that perform similar work, producing dissimilar results, creating the need for imperfect systems of reconciliation, consuming profits and embedding risk.
This bracing perspective can be described as part of the “technology deficit” of banks.  Because banks were among the first users of IT systems, they have among the least modern and most complex systems.  Their systems evolved patch by patch, becoming systems of systems.  See also the “Digital Banking Manifesto: The End of Banks?” (
The great merit of this piece is to bring the radically simplifying perspective of the blockchain movement, and a nuanced approach to the problem and solutions.  The author identifies that the banks already use “smart contracts” in their automated transacting systems.  The financial contracts are mathematically modeled and algorithmically acted on.  The problem is that different banks use different models and algorithms, indeed many banks use multiplicities of models.
The author calls for these to be standardized via open source.  Note that the author focuses on the substantive standard for financial model – ACTUS – and not on the database level – such as blockchains.  The major, practical impact can come from standardization of the model and algorithms, without industry-wide adoption of a particular database system or replacement of the actors in the sector.   The fintech/blockchain revolution may be about the financial industry discovering open source, not any particular technology.  As the author says, ACTUS is “not an invention, but a discovery.”
The author identifies adoption as the major barrier to standards.  The current system works inefficiently, but it works everyday, and it is critical infrastructure.  Incumbent intermediaries have vested interests to protect and mindsets to overcome.  The author remarks that the fintech revolution has focused minds in the financial sector.
As an advocate for open source applied to legal documentation (, I add that adoption may be facilitated by open sourcing the documents of finance.  The efficiency and risk-reduction advantages for incumbents of a systematic approach to legal documents are powerful and immediate.  Symbiotically, open source mathematical models and algorithms can emerge from and contribute to standardized financial documents.

Electrons normally encounter resistance as they move along wires, the pathways that we create for them.  Traveling over a transmission line, there is some loss of power and some heat is generated as the electrons bounce along the path, hopping from one atom to another.  While wires may look straight to us, for the electrons the path is only a bit better than random.  There is resistance in navigating the chaotic pathway.

If the conductive material is made really, really cold, the electricity can pass with almost no resistance at all.  The atoms slow down and stop dancing.  The electrons pass straight through.

In law we can perceive a similar phenomenon.  When a legal pathway is well-established, it becomes smooth.  Events pass through the pathway without ambiguity and they can be made to pass through with little delay or cost.  (Cost and delay can be imposed, as gating rather than friction.)

For example, the transmission of a fractional interest in a business enterprise is very complex conceptually.  If done freehand, the transmission may be documented with hundreds of pages of legal text and description.  In contrast, a sale of a block of shares on a stock exchange has  theoretically equally complicated effects, but the path is clear, execution is rapid and cheap.  The difference between these two situations can be understood in a number of ways; one way is that the second involves a smooth pipe, a well-cooled wire, that connects buyer and seller.

Legal pathways of fixed materials – text building blocks with words that stay still – can become increasingly friction-less pathways by which people wire up their relationships.  The friction will drop – the words will cool – as they are re-used, become known, evolve into standards.

The European GDPR imposes powerful obligations on custodians of personal data to handle that data respectfully. Among the obligations is the right of the persons concerned to demand deletion of the data when no longer needed, and the right to receive a copy in structured format.  The logic of this leads to a P2P data model.  Business and political interests suggest that there is no reason for Europe to pull back when insisting that this logic be applied to its logical end – data, computing and control at the edge rather than the center.  Europe is sensitive to the dangers of too much information being aggregated and European companies have not been winners in the race to create and monetize large aggregations.

Some may doubt whether a system of technologies and actors can exist in which most of the benefits of hub-based transacting can be enjoyed even without massive aggregations of data.

IoT shows the way.  A really functional system of “things” working with one another requires that they be able to do so “locally” – by communicating either directly with one another or via an intermediary who is nearby.  An IoT-equipped furnace must be able to authenticate an IoT-thermostat, verify that the thermostat is who it claims to be and has authority to direct the furnace.  The furnace also needs to verify that the thermostat has the funds – some kind of balance of some kind of currency – and transfers the funds to the account of the furnace, so the furnace can pay for the fuel.  All this needs to be able to occur even if neither furnace nor thermostat can communicate with the outside world.  The internet connection might be down.  For security reasons, too, it is better if the information doesn’t leave the house, except as needed to coordinate with others.

The problem of the thermostat and furnace of course can be scaled up.  The parties might be two ships or two banks.  Their need for action might be less urgent, but ideally they would want the same reliability in dealing with others as the thermostat and furnace enjoy. Their problem is technically less demanding, a lesser-included case.

Governments might want the same independence for their operations and for their economies, companies and citizens.  The technology that solves the problem of IoT interactions can assure the independence of communities, including even countries.



On Friday, March 3, I attended a conference organized by the Stanford Technology Law Review whose title was “Regulating Disruption.”Foot Note

“Disruption” is intended in the Silicon Valley sense of “innovation.” With only a mild stretch, “regulating disruption” can be parsed two ways:

The disruption of regulation, and
The regulation of disruptive activities.

The two parsings join in at least one place:

Effective regulation of disruptive activities will require disrupting regulation.

Digging into this a bit:

Innovative activities can push boundaries, upset relationships, newly expose or aggregate weaknesses, and otherwise cause mayhem.

Innovative activities can be broadly banned, at least in some places and for some time.  But some innovations are genuinely helpful and desired, and some arrive uninvited.

Ideally, a regulatory system would respond rapidly and narrowly to curb the most deleterious effects, and take fuller shape as knowledge of the advantages and dangers accumulates. Regulation would distinguish among different situations and  would respond to “experience.”

The open source community’s iterative system of text sharing can help.  Let’s start with a look at the structure of regulation.  Regulation has layers, including:

  • Quasi global – treaties and community rules such as the EU
  • National – legislation, regulation and precedents
  • Local – like national, and often multi-layered – e.g., state, county, municipality or region, department, city.
  • Trade group or marketplace – membership in an association or market may impose duties, which may be expressed as rules or contracts.
  • Insurers, brokers and others who expect or require conformance.
  • Peer-to-peer agreements and forms – documents “signed” by pairs (or groups) of persons. These are often intermediated by counsel.  Legal departments and law firms nudge transactions into patterns by their forms and expectations.

CommonAccord is addressed to the bottom layer – P2P documents such as contracts, permits, organizational documents. Modularity and reuse as practiced by software developers permits radical improvements in efficiency, transparency and precision. Sharing those materials via git (and GitHub) allows bottom-up quasi-codification that can rise up the chain to wider adoption.  The dynamic is not novel, there are many forms that currently work as quasi-standards, but the new tools can make it radically more efficient, rapid and flexible.

Handling legal text as “prose objects” allows:  i) very efficient use of standards, ii) full flexibility of customization and iii) organic migration of customizations into standards.

In the 19th Century, the common law courts, overwhelmed by the complexities of contract arrangements caused by the industrial revolution, and influenced by economic thinking, declared themselves incompetent to judge the merits of those arrangements and retreated to formalisms such “offer,” “acceptance,” and “plain meaning.” The assumption was that parties were in the best position to judge the fairness and best structure of relationships.  Through experience and diligence, parties in markets would self-regulate. Reality fell short of the theory, in some respects quite substantially.   The consequences of that abstention and wave of innovation are still being worked out in contract practice.

The collaboration methods of the open source software community provide a way to bring reality closer to the theory of parties wisdom embedded in contracts.

Foot Note:  The subtitle of the conference may resolve the dual meanings of the title. The full title is  “Regulating Disruption: Responding to Emerging Technologies” .

The codification of legal and a simple peer-based approach to transacting may be the way that civil society exercises control over the coming, concentrated and largely automated system of production.  Codified legal could be the lever, the “place to stand,” for efforts such as The Future of Life that seek to move (preserve) the earth.