Smart Contracts, Lex Cryptographia, and Transnational Contract Theory

Abstract

The fundamental legal uncertainty surrounding smart contracts concerns legal enforceability of smart contracts, the questions of contractual interpretation, and dispute resolution, i.e., what avenues are open to the parties when things go wrong. Answering these questions and analysing the problems caused by smart contracts that traditional private law must tackle, demands a consideration of what role the law will allow smart contracts to play, what the limitations of formal language systems and immutability are, and the possible lack of remedies and consumer protection traditionally guarded by the state, among others. Recognizing the nature of blockchain technology and smart contracts which evades borders of jurisdictions, this article engages in a transnational legal study of smart contracts, both comparative through a comparative study of contract law, with an emphasis on common law jurisdictions, but also seeing smart contracts as functioning on the border of state and non-state law (and non-law). Ultimately, rather than to regard smart contracts as constitutive of lex cryptographica, the new ‘global law without the state’ proper, it is argued that such smart contracts which can be deemed legal contracts will be subsumed in the state‐cantered positivist private law, which in turn provokes certain theoretical, doctrinal, and practical problems.