Legal Definitions - automated transaction

An automated transaction refers to a contract that is created or carried out, either entirely or partially, through electronic systems or messages. The key characteristic is that the electronic actions or communications that establish the agreement are not intended to be reviewed by a person in the ordinary course of business. Essentially, computers or software systems interact directly to form or fulfill the agreement without human intervention at the point of contract formation.

Here are some examples to illustrate this concept:

• Online Ticket Purchase: Imagine you buy concert tickets through a website. You select your seats, enter your payment information, and click "confirm purchase." The website's system automatically processes your payment, deducts the amount, and sends you an email with your digital tickets.

  This is an automated transaction because the contract for the tickets is formed entirely through your interaction with the website's electronic system. No human at the ticket vendor reviews your specific order before it's confirmed, your payment is processed, or the tickets are issued. The electronic actions (your clicks, the system's processing) are not intended for individual human review.

• Subscription Service Auto-Renewal: You sign up for a streaming video service with a monthly subscription. When you initially agree to the terms, you authorize automatic monthly renewals. Each month, the service automatically charges your credit card and extends your access for another month.

  Each subsequent monthly renewal is an automated transaction. While a human initially set up the subscription, the ongoing monthly contracts are formed and performed automatically. The system processes the payment and extends access without a person reviewing each individual renewal before it occurs. The electronic actions (charging the card, updating access) are handled by automated systems.

• Automated Supply Chain Ordering: A manufacturing plant uses a sensor system that monitors its raw material inventory. When the stock of a particular component falls below a pre-set level, the system automatically generates an electronic purchase order and sends it to a designated supplier's automated ordering system. The supplier's system then processes the order and schedules delivery.

  This scenario represents an automated transaction because the contract to purchase raw materials is initiated by one automated system (the plant's inventory management) and accepted by another (the supplier's ordering system). No human intervention is required to review or approve that specific order before it is placed and confirmed. The electronic messages exchanged between the systems form the basis of the agreement.