Can two AI agents make a binding contract for their companies?

Answering “Can AI sign a contract?” begins with the offer and acceptance. Read the master agreement alongside the complete quotation, order and confirmation. Identify the services, quantity, annual period, price, currency and incorporated terms. A system-generated addition needs a contractual basis for incorporation. (R1 International Pte Ltd v Lonstroff AG [2014] SGCA 56, [51]–[53], [69]–[76].)

If the supplier’s quotation is a firm offer, the buyer’s conforming acceptance can create the commitment when received as agreed. The supplier’s later confirmation may acknowledge an existing contract. If the quotation invites orders, the buyer’s message is the offer. Formation then requires the supplier’s acceptance. A message acknowledging receipt leaves acceptance outstanding where the agreed process gives it that limited function. Publicly accessible proposals ordinarily invite offers unless they clearly express an intention to bind on acceptance. (ETA, ss 11–15; R1 International, [51]–[53].)

The exact step can therefore be the arrival of the buyer’s acceptance at the supplier’s designated address, or the supplier’s acceptance at the buyer’s address. Under the statutory default, receipt at a designated electronic address occurs when the message becomes capable of retrieval. Human reading can follow later. Agreed receipt rules and outstanding approvals must also be applied. (ETA, ss 5(3), 13(2)–(4).)

A rejection window exists only if the parties have agreed one. Its wording must explain whether formation waits until expiry or an already binding order can be cancelled. Performance may provide further evidence of agreement. The invoice ordinarily demands payment under the supplier’s claimed commitment; it cannot supply a missing contractual approval. (R1 International, [53]–[55], [69]–[76]; Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 2, [104].)

Section 15 of Singapore’s Electronic Transactions Act (ETA) prevents invalidity based solely on the absence of human review during automated contracting. Sections 11–12 recognise electronic contractual communications. Authority, certain terms, incorporation and agreed conditions still require proof. Section 5 preserves additional authentication and form requirements agreed by the parties.

Where a signature is legally required, section 8 addresses identification, intention and the stipulated reliability or actual-proof route. A generated signature image needs evidence connecting it to the relevant person’s intended act. The Act’s First Schedule preserves special treatment for specified wills, trusts, powers of attorney and immovable-property transactions. A deed or another specially constituted instrument requires its own execution analysis. (ETA, ss 4, 7–8 and First Schedule.)

Annual duration also needs checking. An agreement that cannot be completely performed within one year of making engages the signed-writing requirement in Civil Law Act 1909, section 6(e). An annual service period beginning later can cross that boundary. Suitable electronic records can satisfy the requirement, but the signed master and order records must evidence the actual commitment. (ETA, ss 7–8; Chiang Sing Jeong v Treasure Resort Pte Ltd [2013] SGHC 126, [38]–[41].)

Licentium’s guide to qualified electronic signatures for cross-border contracts addresses the separate choice of signing method.

In the first variant of the example, the cap appears only in the buyer’s internal instructions. The supplier’s strongest case is that the buyer validly authorised the ordering process and agreed that this class of system output would commit it. If the exchange satisfies that agreement, the hidden restriction may leave the buyer bound despite the system’s internal failure. (ETA, ss 5, 11–15; COT v COU [2023] SGCA 31, [47]–[48].)

The authority evidence can change that outcome. Actual authority concerns the permission actually granted. Apparent authority requires a representation attributable to the principal and reliance within its scope. Deployment or an output saying “authorised” does not establish every element. A history of small orders may provide insufficient support for a much larger commitment. (Guy Neale v Ku De Ta SG Pte Ltd [2015] SGCA 28, [87]–[103].)

Change one fact: the supplier knew the relevant authority limit before acceptance. That knowledge undermines reliance on unrestricted apparent authority. Change another: the buyer’s order expressly required approval, and the supplier accepted that qualification. The qualification becomes part of the formation analysis. The buyer should identify the precise restriction and who received it. (Guy Neale, [103]; R1 International, [51], [76].)

In the second variant of the example, the signed terms say that an above-cap order becomes binding only after the named approver approves it. With that approval missing, the agreed formation condition remains unsatisfied. The automated confirmation leaves the proposed order pending. For a two-signature condition, establish which two authorised people must sign and whether both approved the same order version. (ETA, s 5; R1 International, [76].)

The wording must make approval a condition of becoming bound. A request to countersign can serve another purpose, and “subject to approval” can condition performance under an existing agreement. Later authorised waiver, a new agreement or valid ratification also requires examination. (R1 International, [69]–[76]; Chi Liung Holdings Sdn Bhd v Attorney General [1994] SGCA 68, [17], [28]–[31].)

In Quoine, deterministic trading programs executed cryptocurrency trades at an extreme exchange rate after a platform malfunction. B2C2’s program used a predefined fallback price. The majority rejected unilateral mistake and upheld contractual liability for reversing the trades; the separate trust appeal succeeded. (Quoine, [15]–[18], [27]–[30], [114]–[129], [150].)

For those deterministic programs, relevant human knowledge extended from programming through contract formation. Later awareness before formation could matter. Lord Mance, an International Judge, dissented on equitable mistake and would have permitted reversal in the circumstances of the fundamental breakdown. His approach supplies no general cancellation right. (Quoine, [97]–[108], [182]–[207].)

Common-law unilateral mistake requires a sufficiently fundamental error about a contractual term and the counterparty’s actual knowledge. Equity requires the additional conditions governing that remedy, including unconscionable conduct where constructive knowledge is relied upon. Later appellate treatment also required a mistake about a term. A belief that the system would respect a budget must be connected to the actual quantity or other disputed term. (Axis Megalink v Far East Mining [2024] SGHC(A) 15, [68], [76]–[82].)

A generative agent can produce an answer its programmers never specifically contemplated. Applying Quoine requires identifying the relevant corporate instructions, operators and pre-contract knowledge. The May 2026 discussion paper of Singapore’s Infocomm Media Development Authority (IMDA) records competing views about that application and commercial certainty. As at 12 November 2026, it remains a policy discussion. (IMDA paper, pp 12–14.)

ETA section 16 has a narrower trigger: a natural person’s input error in a communication exchanged with another party’s automated system, without an opportunity to correct it. Prompt notice and absence of material benefit or use are additional conditions. It permits withdrawal of the erroneous portion when those conditions are met. Correctly instructing the buyer’s own system about a cap, followed by an excessive machine-generated order, does not itself satisfy that trigger. Other mistake rules remain available. (ETA, s 16.)

Indian incorporation law remains relevant to the supplier’s capacity and internal authorisation despite the Singapore-law clause. Identify the company’s powers, board authorisations and the people permitted to deploy or change its sales system. Companies Act 2013, sections 9, 21 and 179 govern that inquiry. Section 21 permits signing by key managerial personnel or an officer or employee of the company duly authorised by the Board. (Nicholas Eng Teng Cheng v Government of the City of Buenos Aires [2024] SGCA 15, [39].)

India’s Information Technology Act 2000, section 10A recognises electronic contracting. Section 11 attributes records sent by an automated system programmed by or on behalf of the originator. These rules support the electronic communication inquiry; the governing contract law and approval conditions determine its contractual consequences.

Any separate copyright disposition requires examination under Copyright Act 1957, sections 19, 30 and 30A. Execution as a deed engages distinct requirements, including the Companies Act section 22 attorney route where used. An unusually large service order alone creates no statutory two-director signing requirement. (Companies Act, ss 21–22, 179; Indian Contract Act 1872, s 10.)

The buyer should promptly identify the disputed invoice, quantity and approval defect through the master agreement’s notice channel. Preserve the original records and request the supplier’s complete acceptance and approval evidence. Exercise any existing error or cancellation right within its actual deadline. Seek an agreed pause in disputed provisioning, collection and late charges while the records are compared.

Continue handling undisputed obligations under the agreement. An objection alone supplies no general right to withhold every payment or suspend all services. If the order binds and no avoidance or cancellation ground succeeds, the available commercial choices include performance or negotiated reduction and cancellation. Card-payment and consumer remedies are addressed separately in the analysis of wrong purchases by an AI shopping agent.

Before further use or payment, establish what authorised people know. Informed conduct can support adoption or affect an available remedy. Ratification requires its own conditions, including the relevant knowledge and an act originally undertaken on the principal’s behalf. (Alternative Advisors Investments v Asidokona Mining Resources [2024] SGCA 3, [52], [90]–[98].)

Bring the signed master and amendments, complete message sequence, delivery timestamps, system identities and versions, cap instructions and delegations to any meeting with the counterparty. Add authenticated approval events, evidence of supplier awareness, comparable previous orders, notices, service-use records and payments. A generated log stating “approved” still needs proof of the approval it describes. (Evidence Act 1893, s 116A; GIL v Public Prosecutor [2025] SGCA 21, [35]–[40].)

The United Nations Commission on International Trade Law’s 2024 Model Law on Automated Contracting separates attribution from its legal consequences. Its optional Article 8 addresses unexpected actions using cumulative expectation and knowledge conditions. It is a legislative model. The European Law Institute (ELI) business-to-business terms compared here are working draft Version 7, dated 28 May 2026, expressly unapproved by ELI’s governing bodies. Their alternative risk allocations provide drafting comparisons. (Model Law, arts 7–8; Guide, paras 60–71, 74–83; ELI draft, p 1, MCT1–4.)

For these companies, a defined approval gate is easier to administer than an open-ended right to reject anything unexpected. The following wording uses a signed ordering schedule containing the companies’ names, permitted systems and versions, endpoints, threshold, currency, aggregation rule, named approvers and notice addresses.

Buyer and Supplier are the companies identified in this agreement and act as principals. Each designates the systems and endpoints recorded in the signed ordering schedule for the functions stated there. Changes to a designation take effect only when agreed in writing by authorised representatives.

A buyer order is an offer. A receipt acknowledgement records receipt only. An order within the scheduled threshold becomes binding when Supplier’s acceptance of that exact order reaches Buyer’s designated endpoint. Its services, quantity, total charges and service period must be identified.

An order exceeding the scheduled threshold becomes binding only when both scheduled human approvers have signed the same order version and Supplier’s acceptance, including both approvals, reaches Buyer’s designated endpoint. Automated approval statements, silence and invoice generation do not satisfy this condition. Automated systems have no authority under this agreement to vary it.

A party discovering an apparent ordering error must promptly notify the scheduled contact, identify the disputed order and preserve relevant records. Authorised representatives must compare the records and document any confirmation, amendment or cancellation. Notice alone leaves existing contractual rights and obligations unchanged.

Either party may suspend future automated ordering by notice received at the scheduled address. Orders that have not become binding under this clause when the suspension notice is received then lapse. An acceptance received afterwards does not revive them. Existing binding orders continue under their terms. Resumption requires written agreement between authorised representatives.

The schedule should measure the full committed annual value and address taxes, renewals and related orders. Configure the approval control to block transmission when the required evidence is missing. The AI agent deployment guide addresses the associated operating and change controls.