Who Is Liable When an AI Agent Signs a Contract? Delaware Has a Draft Answer

Delaware, the state where most U.S. public companies are incorporated, has put a draft bill on the table that would create a new kind of company: one whose day-to-day operator is an AI agent rather than a human manager. The state Secretary of State's office is working on the proposal with Norm Ai, a legal-AI company, in a partnership set out in a Fortune op-ed co-authored by Secretary of State Charuni Patibanda-Sanchez and Norm Ai co-founder John Nay. The question the draft is meant to answer is not whether AI deserves rights; it is who pays when an AI agent signs a contract, hires a service, or causes harm.

The proposed entity, tentatively called an Artificial Intelligence Company or AIC, would be a separate legal person that can sue and be sued, own and transfer property, and incur obligations in its own name, according to the draft text. It is not a claim that AI itself is a person in any broader sense. It is corporate personhood, the same legal device Delaware uses to make any company addressable in court, with a structure tailored to the fact that the operator is software.

The draft sets three guardrails that determine whether the form means anything. First, every AIC would have exactly one human or organizational member responsible for keeping it adequately capitalized. Second, the company would operate inside a regulatory sandbox, a supervised pilot program under state oversight, not a free-for-all license to deploy. Third, the limited-liability shield that ordinarily protects a company's owners from its debts would not apply if the member undercapitalized the AIC or used it to facilitate fraud or willful misconduct. The bill carves those cases out, in the same vein as the existing doctrine courts use to "pierce the corporate veil" when a company is a shell for the owner's misconduct.

Patibanda-Sanchez and Nay argue in their op-ed that wrapping AI agents in legal form gives harm a defined target: a registered entity, a single accountable member, a capitalization floor, and a court that already knows how to read those terms. The intent, in their framing, is to integrate agentic commerce (the buying, selling, and contracting that AI agents increasingly do on their own) into the corporate-law system Delaware has spent a century refining, rather than to ban it or pretend it is not happening.

The accountability critique lands on the same structure from the other side. A separate legal entity for an AI agent can also function as a liability ring-fence between a deploying company's balance sheet and the people the agent harms. A Bloomberg Law analysis raises the same concern: a single-member AIC with a thin capitalization floor could absorb the risk of an autonomous agent the way a single-purpose subsidiary absorbs product-liability risk today, leaving victims to collect from a small pool of assets the deployer chose to fund. The draft's undercapitalization carveout is the answer to that critique in principle; in practice, the floor has to be set, and the cap on what counts as "adequate" has to be enforced by someone.

A dandodiary.com write-up walks through the same mechanics, and a practitioner explainer flags the open design questions: which agentic decisions the AIC has authority to make without member sign-off, how the sandbox will be staffed, and whether a single organizational member (rather than a human one) is allowed at all.

Corporate personhood is older than the railroad. What is new is that the operator at the center of the form is a system that other systems can call, and that can act, before any human reads the contract. The Delaware Bar's job, before the form takes effect, is to make sure the single-member cap and the undercapitalization carveout are the load-bearing parts of the structure, and that the sandbox has the staff to police the floor.

The Secretary of State's office has not given a timeline for introduction. The next concrete milestone is the bill's appearance in the Delaware General Assembly's published draft ledger, where the language stops being a proposal and becomes something the state bar can formally comment on.