Smart Contracts and the Law

Abstract

Smart contracts raise a number of interesting legal issues. An ongoing legal debate concerns a number of potential legal pitfalls related to smart contracts, including the existence of a valid, binding legal contract, the ability to reconcile the immutability of blockchain records with contractual deficiencies, governing law and applicable jurisdiction, consumer protection, anti-money laundering/combating the financing of terrorism (AML/CFT) requirements, implications of automated, unstoppable execution, as well as privacy and confidentiality of smart contracts deployed on borderless decentralized blockchain networks. This chapter provides an overview of the most commonly invoked advantages of smart contracts and highlights the fervor of the scholarly legal debate surrounding smart contracts. It also presents a range of legislative initiatives taken so far in response to the smart contracts phenomenon.