Most contracts are designed for a world that operates in discrete steps—a decision is made, action follows, and changes are addressed as they arise. However, the rise of 'agentic' artificial intelligence (AI) is disrupting this traditional rhythm, necessitating a fresh approach to contractual agreements.

Agentic AI does not imply robots making autonomous decisions akin to sci-fi fantasies. Instead, it refers to systems that operate continuously within set parameters, without waiting for human instructions. These systems monitor real-time data and make decisions within predefined limits, only alerting humans when certain thresholds are crossed. This shift from discrete to continuous action presents new legal challenges, as traditional contracts typically manage actions that occur in bursts, not in streams.

The core of the problem lies in the static nature of traditional contracts. They are built on commitments made at the time of signing, with audits and notices scheduled at regular intervals or triggered by specific events. However, when a system continuously updates and decisions accumulate over time, it becomes difficult to pin down when a change occurred or when a notice should have been issued.

Recognizing these challenges, some forward-thinking lawyers began to adapt their contracts in 2025. These early modifications included conditional permissions, event-based notifications, and audit rights tied directly to system behavior or significant changes. These changes represent a shift from static obligations to conditional execution, where contracts are designed to respond to behavior as it evolves.

This transformation in contractual design is crucial not just for managing legal risks but also for maintaining relevance in a world where AI systems continually adapt and evolve. Contracts that cater to this continuous behavior incorporate mechanisms for escalation and oversight, which provide clarity and control when deviations occur. This approach doesn't just mitigate risks—it makes system behavior legible and manageable in real-time scenarios.

This ongoing shift may not be standard or uniform yet, but it’s clear that the landscape of legal agreements is changing. The move towards governing continuous behavior in AI systems is already underway, reflecting a deeper understanding of how technology now operates independently of human intervention. By the time this shift becomes obvious to all, it will be too late to regard it merely as a theoretical concern. Contracts need to evolve now to address the realities of today’s continuously operating AI systems.