Compose arbitrary financial contracts using Python.
This repository implements the ideas described in a research paper (https://www.microsoft.com/en-us/research/wp-content/uploads/2016/07/contracts-icfp.pdf) that defines a small set of composable primitives for building complex financial contracts. By implementing the precise language described in the paper, this project aims to make it possible to model, simulate, and reason about financial agreements in a principled way.
The long-term goal is to enable users to ask hypothetical questions about their finances (e.g., What happens if interest rates change?, What is the future value of this agreement?). Combining this framework with generative AI for natural-language interaction is a potential next step.
Overview
Traditional financial products (loans, options, insurance, bonds, derivatives) can be expressed as combinations of simple contract primitives. This project provides:
A domain model for financial contracts
A compositional framework for building complex agreements
Tools for evaluation and simulation of contract outcomes over time
Instead of hardcoding specific instruments, the system allows users to construct contracts from reusable building blocks.
Core Ideas
The implementation follows a compositional approach where contracts are built using a small set of primitives such as:
Transfers — movement of value between parties
Scaling — multiplying contract value
Temporal constraints — contracts that activate at specific times
Conditionals — contracts dependent on external conditions
Composition operators — combining multiple contracts
This allows complex financial instruments to be expressed declaratively and evaluated programmatically.
Features
Composable financial contract primitives
Deterministic contract evaluation
Time-based contract behavior
Extensible design for custom contract types
Foundation for financial simulation and scenario analysis
Project Goals / Roadmap
Complete implementation of the contract language
Contract evaluation engine
Market observables and external data integration
Simulation tools
Natural-language interface using generative AI
Visualization and analysis tools