Declaring Degradation: A Fallback Contract for AI Agents That Lose Their Cloud Model

An illustrative scenario describes a nightly job that tags support tickets via a remote model, where a retry wrapper silently returns empty tags during timeouts and the failure goes unnoticed. The author argues this is a missing contract between a capability and its degraded form, not a model-quality issue. The proposed remedy is a three-tier declaration (local_only, cloud_preferred, cloud_required) that specifies whether each tool may leave the host and what it may return when the cloud path is unavailable. Declarations live alongside each tool as data, so reviewers can audit them and missing entries fail at startup rather than at runtime. A small outcome object reporting status (ok, degraded, refused) and payload source is recommended over resolvers that return inconsistent values.