AI Agents and Corporate Liability: A Comparative Policy Analysis for Business Law Reform in India

Abstract The emergence of autonomous AI agents, which can independently negotiate contracts, conduct financial transactions, manage customer interactions, and make business decisions with minimal human involvement, has ushered in a revolutionary era for Artificial Intelligence (AI). They promise greater efficiency and innovation, but also expose serious gaps in traditional legal doctrines of corporate liability that assume human agency, intention, and control. Recent events such as the Air Canada chatbot litigation, Robodebt in Australia, and Childcare Benefits Scandal in the Netherlands show that autonomous algorithmic decisions can lead to contract disputes, discriminatory outcomes, consumer detriment, financial loss, and institutional failures, raising fundamental questions of corporate accountability and legal responsibility. The paper seeks to critically analyze whether the existing legal framework in India, i.e., the Companies Act, 2013, the Indian Contract Act, 1872, the Consumer Protection Act, 2019, the Information Technology Act, 2000, and the Digital Personal Data Protection Act, 2023, can deal with the liability arising due to autonomous AI agents making commercial decisions. This study adopts doctrinal, comparative, and policy-oriented legal research methods to examine emerging international regulatory approaches, such as the European Union AI Act, the OECD AI Principles, ISO/IEC 42001 Artificial Intelligence Management Systems, and Singapore’s AI Governance Framework, with a view to identifying global best practices for responsible AI governance. The paper argues that traditional fault-based liability is increasingly ill-suited to situations in which artificial intelligence systems independently influence corporate decisions. It proposes a risk-based governance framework requiring AI oversight at the board level, mandatory algorithmic audits, human accountability mechanisms, explainability requirements, and statutory reforms to embed AI governance in Indian business law. The study connects technological innovation to corporate accountability, contributing to the ongoing discussion on responsible AI regulation and offering policy recommendations to build a robust legal ecosystem that supports sustainable economic development in the Industry 5.0 era.