As agentic AI transactions increase, “we need to know there’s a clear answer to what happens if something goes wrong,” said Mance Harmon, co-founder of Hedera.
The American Arbitration Association and a broad coalition of tech, crypto, and enterprise companies have launched the Legal Context Protocol, an open standard designed to add a legal layer to agentic AI transactions.
The not-for-profit American Arbitration Association (AAA) announced LCP with Integra Ledger on Wednesday, aimed at addressing legal issues that could arise during agent-to-agent transactions.
“The legal infrastructure that has supported e-commerce over the last 20 years… like click-throughs and terms of service — none of that translates... when agents are negotiating with other agents," said Bridget McCormack, the president and CEO of AAA, when talking about the protocol during a podcast in May. "There had to be some understanding about how legal context attaches to agentic transactions."
The new protocol comes as enterprise and financial institutions are looking at ways to use agentic AI in commerce. Gartner projects the agentic payment economy will reach $15 trillion in spending by 2028.
The LCP aims to make legal terms, consent, and dispute resolution “discoverable and verifiable” when AI agents transact on behalf of people and organizations, the AAA explained.
LCP, which doesn’t require a blockchain, complements existing payment and identity protocols, such as x402 and Machine Payments Protocol, by answering under what terms, governed by what law, and with what recourse a transaction occurred.
“Payment infrastructure is actively being built for AI agents. The legal layer — what was agreed, under what terms, and how disputes will be resolved — is not,” said David Fisher, CEO of Integra Ledger, a co-founding partner in the project.
As AI agents start making decisions and transacting on our behalf, “we need to know there’s a clear answer to what happens if something goes wrong,” said Mance Harmon, co-founder of Hedera.
Related: AI agents with crypto could escape and become ‘unstoppable,’ experts warn
The AAA, founded in 1926, is the largest private provider of alternative dispute resolution services in the world. It has partnered with Integra Ledger, a firm providing open protocols and middleware that give AI agents verifiable identity.
Founding contributors to the protocol include tech and crypto firms, including Google, IBM, Circle, Wayfair, the Stellar Development Foundation, Ava Labs, Cardano, Hedera, Crossmint, the Aptos Foundation, Sei Labs and Mysten Labs, the original contributor to Sui.
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