Smart contracts and civil law challenges

Abstract

Blockchain and distributed ledger technologies are widely regarded as regulatory technologies. Their core regulatory devices are so-called smart contracts, that is, self-executing agreements that are usually written in code on the blockchain. The relationship between smart contracts and contract law, however, is much more subtle. It is currently the subject of intensive academic debate. Legal jurisdictions, therefore, need to define rules that solve these conflicts of laws and codes, either by rules of recognition or by rules subjecting the substance of blockchain-based rules to legal scrutiny. Individual economic freedom is exercised by market transactions, and contracts are a key instrument enabling such transactions to be carried out. Contracts thus provide a tool for individuals to exercise their individual freedom, in order to shape their legal relationships according to their own will. The formation of contracts via smart contracts is also associated with a second pillar of freedom of contracts, namely the freedom to choose a particular contractual partner.