Applicable Law to Smart Contracts

Abstract

The profound digital transformations currently shaping the world—particularly in the field of contracting—have given rise to a new type of legal relationship known as self-executing smart contracts. These contracts are characterized by their autonomous conclusion and execution through blockchain technology, without the need for continuous human intervention. This poses a significant challenge to traditional legal frameworks, foremost among them the conflict-of-law rules in private international law. These rules presume the existence of certain criteria that allow for the determination of the law applicable to the legal relationship in dispute, whether based on the place of contract formation, the place of performance, or the nature of the contested relationship. However, the decentralized technical nature of self-executing contracts undermines these assumptions and weakens the ability of the adjudicator to apply traditional legal tools in understanding the relationship and attributing it to the appropriate legal system.