Modeling Directed Obligations and Permissions in Trade Contracts Yao-Hua Tan and Walter Thoen EURIDIS Erasmus University Rotterdam P.O. Box 1738 3000 DR Rotterdam ytan@fac.fbk.eur.nl thoen@caiw.nl Abstract In this paper we present definitions for directed obligation and permission in trade procedures and contracts. These definitions are based on deontic logic and action logic. The aim of these definitions is to give better models of directed obligation and permission that enables better modeling of procedures and contracts in (electronic) commerce.We show that these definitions can be used to give a more sophisticated formal framework for representing so-called Deontic Deep Structure Models (DDSM) for business procedures. These models can be used to support the electronification of such procedures. 1. Introduction In [13] we presented a first draft of a formal model, called Deontic Deep Structure Model, for the analysis of international trade procedures and contracts in electronic commerce. The logic used in that paper was a combination of a logic of directed obligation, as proposed by Herrestad and Krogh [4], and a logic of direct/indirect action, as proposed by Santos and Carmo [11]. Although this combined logic proved to be useful for our purposes, there are some weak points in this logic. The definition of directed obligation, as given by Herrestad and Krogh, might raise some questions and they did not present a definition of directed permission at all. In this paper we discuss some of these questions about the definition of directed obligation and we propose several improved definitions of directed obligations. In these improved definitions we make use of the attempt operator introduced by Santos, Jones and Carmo [12] and the empowerment conditional of Jones and Sergot [5]. We also give formal definitions for directed permissions. Why formal models for analysing international trade procedures? Deontic logic is the logic about deontic notions such as obligations, rights and permissions. At first instance the deontic relations between agents engaged in a trade procedure seem straightforward. A seller agrees to deliver some goods and a buyer agrees to pay for these goods. So the seller simply bears an obligation to deliver some goods and the buyer bears the obligation to pay for these goods. The following scenario 1 shows, however, that it is not so obvious when obligations or permissions are created, and that a careful formal analysis of the trade procedure can be very useful. Suppose a buyer wants to buy some equipment from a seller, therefore the following scenario is executed. Seller Request for Quotation Quotation Purchase Order Order confirmation 1 2 3 4 Buyer 1. The buyer sends a request for quotation to the seller. 2. The seller responds by sending a quotation to the buyer. 3. The buyer sends an order to the seller. 4. The seller receives the order and sends an order acknowledgement to the buyer. 1 This example is an adapted version of an example Dewitz and Lee give in [3]. 1060-3425/98 $10.00 (c) 1998 IEEE