No contract could contain clauses for every eventualities since contract parties simply could not foresee all possible events in a dynamic world, or simply decide not to raise them during negotiations as their expected utilities are considered of low value. Thus frequently when circumstances change, making a signed contract more onerous, the aggrieved party has incentive to repudiate with arguments that sound like “this is not what I promised to perform”.  Dispute resolution ensures that contract parties are committed to their obligations and no party could swindle or abuse the other. This enables parties to rely on their signed contract to arrange their affairs, a feature critically important in any dealing of business.

Real-world contract dispute resolution must be guided by laws, even if such disputes may be resolved by bodies other than the court of laws. Therefore to understand how such dispute resolution could be designed online especially for emerging Grid service contract disputes where actual courts are often not affordable, we need to understand what the laws say about them. We focus on common law as it is the kind of law most studied in the literature, but the results could be easily applied to other kinds of laws such as civil law.

Our argument-based formalism for contract dispute resolution follows a modern view at common laws that the court would resolve a contract dispute by enforcing a hypothetical contract (also called complete intended contract) that reasonably represents the mutual intention of contract parties. The formalism models the court in arriving at such a hypothetical contract by a two-level modular argumentation (a recent extension of assumption-based argumentation to allow different modules of argumentation to be built separately and assembled together by different semantics) process: at object level factors of the case are established from argumentation modules representing the contract context while at meta-level argumentation modules representing legal doctrines combine these factors to ascertain shared, but unexpressed intention of the contract parties.

Our experimented system called MoDiSo can reason with legal doctrines for performance relief and explain its reasoning by simulating the exchanges of arguments between contract parties and a fictitious judge. It runs online, using a general-purpose multi-semantic modular argumentation engine via web services. MoDiSo as well as the formalism are developed by Asian Institute of Technology and supported by the Sixth Framework IST program of the EC, under the 035200 ARGUGRID project.