A Meta-model for e-Contract Template Variable

Dependencies Facilitating e-Negotiation

Dickson K.W. CHIU Dept. of Computer Science & Engineering,

Chinese University of Hong Kongkwchiu@acm.org, kwchiu@cse.cuhk.edu.hk

Shing-Chi CHEUNGDept. of Computer Science

Hong Kong University of Science & Technology

scc@cs.ust.hk

Patrick C.K. Hung Dept. of Management

SciencesUniversity of Waterloo

ckphung@engmail.uwaterloo.ca

ER2002-2

Introduction e-Contract

computerized facilitation or automation of a contract cross-organizational business process

Negotiation a decision process in which two or more parties make

individual decisions and interact with each other for mutual gain

e-Negotiation perform negotiation activities over the Internet

ER2002-3

Contract Templates Reference document based on which a new contract is created Contains a set of template variables whose values are to be

negotiated Particularly applicable to standard business interactions that

could be taken place over the Internet Such as real-estate transactions, purchase and sale of goods,

etc. New e-Contracts for these business interactions can be defined

based on standard contract templates Specific business interactions not covered by the clauses in

standard contract templates can be provided as contract variations or contract escalations

Tenant is required to pay landlord [ ] months’ deposit, amount to [ ], which is refundable without interests upon contract termination on the condition that …

ER2002-4

Motivation and Objectives

e-Contract template and template variables facilitate negotiation by avoiding uncontrolled openness of issues

Address specific semantic requirement of contracts for supporting B2B applications

Reduce cost and improve effectiveness of negotiation(avoid combinatorial explosion of issues)

Development of an effective and efficient negotiation plan in a natural way

Rapid development and deployment of a flexible negotiation support system (NSS) through reuse

ER2002-5

Overall Meta-modeling Approach Based on business experience and

requirements, contract templates (with variables) are abstracted from previous contracts

A contract template is modeled as an e-Contract template

Determine template variable relations (dependencies)

Derive e-Negotiation plan Execute the e-Negotiation plan with a NSS Each successful e-Negotiation will lead to an e-

Contract

ER2002-6

Meta-Model of an e-Contract Template

e-ContractTemplate

*1

1..*

1..*

TemplateVariable

indivisiblyrelates to

*

*

2..*

involves

*

set values to

Obligation Permission Prohibition

*

*

precedes

e-Contract Party

concerns

Contract Clause

references

ER2002-7

A Lease e-Contract Template as an Instance of the Meta-model

lease:e-Contract Template

landlord:Party

tenant:Party

deposit payment:Contract Clause

facilities inclusion:Contract Clause

effective period:Contract Clause

rent payment:Contract Clause

deposit:Template Variable

numOfMonths:Template Variable

facilities provision:Template Variable

lease period:Template Variable

start date:Template Variable

rent:Template Variable

mgt fee payment:Contract Clause

mgt fee inclusion:Template Variable

precedes indivisibly relates to

ER2002-8

Motivating Example

leaseperiod

facilitiesprovision

basic rent

start date

additional fee1

mgt feeinclusion

additionalfee2

Landlord

Tenant

rent

deposit

numOfMonths

Relationships among variables Negotiated in a bundle, e.g., facilities provision, lease period and

rent A partial order, e.g., rent and deposit Individually negotiated, e.g., start date, management fee inclusion Principle variables (e.g., rent) made up of parts called auxiliary

variables

TemplateVariable

AuxiliaryVariable

indivisiblyrelates to

*

*

1*

factorizes into

precedes *

*

analyzed by, say, real-estates

agency

Variable

ER2002-9

Conceptual Model of e-Negotiation and e-Contract

TemplateVariable

Party Negotiation

Accepted Alternative Value

Alternative Value

makes

1

1..*

1..*has

1..*

1..*

*

logrolls

1..*

2..*

involves

Issue1

1

*

*

Contract Clause

AuxiliaryVariable

precedes

Variable

Accepted Offer

maps to

PlanOffer

*

e-Contract Conceptual

Model

e-Negotiation Conceptual

Model

1

1..*

1 **

**

resolves1..*Task 1

ER2002-10

Derivation of Negotiation Plan

leaseperiod

facilitiesprovision

basic rent

start date

additional fee1

mgt feeinclusion

additionalfee2

Landlord

Tenant

rent

deposit

numOfMonths

{facilities provision, lease period, basic rent}

{start date, additional fee1}{management fee inclusion, additional fee2}

{rent}{numOfMonths}

{deposit}

Partial ordering of variables (sets)

ER2002-11

e-Negotiation Process Meta-modelin UML Activity Diagram

How we carry out e-Negotiation in general …

select e-Contracttemplate

derive variablerelations

define issues and criteria

for eachcollectionof co-relatedissue

make offers &counter offers

validateconsistency

formulateplan

organize tasks

all issueshave beenmapped

[consistent][inconsistent]

creation ofe-Contract

[reach consensuson all variables]

[quit]

ER2002-12

Make Offer and Counter Offer

To be supported by a web-based NSS May be based on WFMS (e.g., E-ADOME)

Negotiate: management fee inclusion,

additional fee1

Negotiate: facilities provision,

lease period, basic rent

Negotiate: start date,

additional fee1

Computesdeposit

Negotiate: number of months

Compute rent

ER2002-13

NSS – Create Contract Template

System administrator create new contract template by entering different contract template variables

ER2002-14

NSS - Grouping & Auxiliary Variables

System administrator then input grouping and auxiliary variables

ER2002-15

NSS - Input Dependencies System administrator then input dependencies among groups / issues

ER2002-16

NSS - System Generates Plan

System generate negotiation plan

ER2002-17

Future Work

Study of the general negotiation process (Chiu et al., PACIS 2002)

Users having different logrolling views (i.e., different negotiation plan in mind) (Cheung et al., HICSS 2003)

One-to-many contract negotiation Ranking of different types of issues and criteria for

logrolling issues (Hung, HICSS 2003) Decision making to reach an optimal and stable

state for negotiators (Nash equilibrium) Study of e-Contract enforcement

(Chiu et al., HICSS 2003) Real-life negotiation practice

ER2002-18

Conclusions An novel application of computer science

techniques for a management problem A novel approach of e-Negotiation of contracts

based on e-contract template A meta-model for e-Contract templates with the

notion of template variables and their dependencies

A flexible meta-model for e-Negotiation processes Derivation of effective and efficient negotiation

plan Facilitate rapid implementation based on workflow

management systems (e.g., our E-ADOME WFMS), supporting the cross-organizational process via contemporary Internet technologies