LEGAL NATURE OF SMART CONTRACTS AND CONFLICT OF LAW

Abstract

With the development of technology innovations it becomes possible to regulate relations between the parties through smart-contracts. Smart contracts are based on blockchain technology, which is a decentralized distributed ledger system consisting of a chain of computers connected to one server. This technology is so convenient for parties to the treaty, because it gives the participants of smart contract an opportunity to exchange property values without intermediaries such as notaries, guarantors, etc. It is to be noted that smart contracts are not resolved in most countries. Now in many countries, however, there is a formation of the legislative framework in the sphere of the smart contracts by considering a smart contract like an element of a legal transaction with the introduction of blockchain technology, which is explained by the desire to keep up with technical progress. There were some attempts in the International Private Law to conclude smart-contracts. As is well known the traditional question in the International Private Law is a conflict of law that is so popular now for smart contracts that using blockchain technology involve multiple jurisdictions. That’s why the choice-of-law issues in the regulation of relevant relations, including the projection concerning choice of law in those States where super-priority is adjusted for those innovations, requires further research. In this article the authors have analyzed the concept and essence of smart contracts (Smart Contracts), researched the problem of conflict of law, applicable to such contracts. In particular analysis focused specifically on the Rome I Regulation in the aspects of smart contract management. The paper also touches upon problematic aspects related to choice of law applicable to the smart contracts in Ukraine. In conclusion, the prospects for the use of smart contracts in International Private Law.