LEGAL CHALLENGES OF PROVING DEFECTS OF CONSENT IN SMART CONTRACTS: A COMPARATIVE STUDY BETWEEN JORDAN AND THE UAE

Abstract

The development of smart contracts on distributed ledger technology has created very real doctrinal and evidentiary problems for the classical consent theory-based legal system. This article conducts a thorough comparative study on the legal regimes of defects of consent error, fraud, duress and misrepresentation regarding smart contracts in the light of the international conventions adopted by the United Nations Commission on International Trade Law (UNCITRAL) and the United Nations Principles of International Commercial Contracts (UNCPC). The study highlights key gaps in legislation and clear issues of evidence that hinder claimants from establishing vitiated consent in algorithmically executed contracts, grounded in primary legislative sources, such as the UAE Federal Law No. 5 of 1985 (Civil Transactions Law), UAE Electronic Commerce Law No. 1 of 2006, the regulatory frameworks of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), and Jordanian Civil Code No. 43 of 1976. The analysis demonstrates that, while automated self-executing code involves one-to-one interaction between a digital entity and a human user, both jurisdictions are poorly suited to deal with these types of interactions, as the record cannot be altered and the party deploying the code can be anonymous, and the 'agreement' can be either ambiguous or impossible in practice. The article suggests a three-part reform agenda – (i) technology-neutral statutory amendments to explicitly apply the doctrine of “defect of consent” to algorithmic agents; (ii) forensic evidentiary rules for the authentication of blockchain data and expert testimony; and (iii) a specialised dispute resolution mechanism based on the ADGM's current smart contract recognition framework. The findings add to the still emerging literature on smart contract legality in the Arab world, and provide practical suggestions for legislative reform.