A declarative approach to business rules in contracts

We address why, and especially how, to represent business rules in e-commerce contracts. By contracts, we mean descriptions of goods and services offered or sought, including ancillary agreements detailing terms of a deal. We observe that rules are useful in contracts to represent conditional relationships, e.g., in terms& conditions, service provisions, and surrounding business processes, and we illustrate this point with several examples. We analyze requirements (desiderata) for representing such rules in contracts. The requirements include: declarative semantics so as to enable shared understanding and interoperability; prioritized conflict handling so as to enable modular updating/revision; ease of parsing; integration into WWW-world software engineering; direct executability; and computational tractability. We give a representational approach that consists of two novel aspects. First, we give a new fundamental knowledge representation formalism: a generalized version of Courteous Logic Programs (CLP), which expressively extends declarative ordinary logic programs (OLP) to include prioritized conflict handling, thus enabling modularity in specifying and revising rule-sets. Our approach to implementing CLP is a courteous compiler that transforms any CLP into a semantically equivalent OLP with moderate, tractable computational overhead. Second, we give a new XML encoding of CLP, called Business Rules Markup Language (BRML), suitable for interchange between heterogeneous commercial rule languages. (cont.) BRML can also express a broad subset of ANSI-draftKnowledge Interchange Format (KIF) which overlaps with CLP. Our new approach, unlike previous approaches, provides not only declarative semantics but also prioritized conflict handling, ease of parsing, and integration into WWW-world software engineering. We argue that this new approach meets the overall requirements to a greater extent than any of the previous approaches, including than KIF, the leading previous declarative approach. We have implemented both aspects of our approach; a free alpha prototype called Common-Rules was released on the Web in July of 1999, at http://alphaworks.ibm.com.