The Legal Status of Blockchain-Based Smart Contracts as Electronic Agreements under the Indonesian Positive Legal System

Abstract

Blockchain-based smart contracts automate the execution of transactions through computer code, but automation alone does not determine whether the resulting arrangement is a legally binding contract. This article examines the legal status and enforceability of blockchain-based smart contracts as electronic agreements under Indonesian law and evaluates how the validity requirements in Article 1320 of the Indonesian Civil Code operate in a pseudonymous, automated, and relatively immutable technological environment. Using doctrinal legal research, the study integrates the Indonesian Civil Code, the Electronic Information and Transactions Law (EIT Law) as amended by Law No. 1 of 2024, Government Regulation No. 71 of 2019, and current financial-sector regulation, supported by comparative analysis of the UNCITRAL Model Law on Automated Contracting, the UK Law Commission's work on smart legal contracts, and relevant European regulatory design. The analysis finds that Indonesian law can recognize a blockchain-based arrangement as an electronic contract when an identifiable agreement is formed through an electronic system and the substantive validity requirements are satisfied. Government Regulation No. 71 of 2019 is particularly significant because Article 46 reproduces the core elements of contractual validity for electronic contracts, while Article 47 requires party identity, transaction terms, cancellation procedures, and choice-of-law provisions. The principal legal uncertainty therefore lies less in basic contractual validity than in attribution of consent and capacity, code-text inconsistency, automated-agent responsibility, coding or oracle errors, reversibility of remedies, and cross-border enforcement. The article recommends targeted, technology-neutral rules and contractual design safeguards rather than assuming that either code alone or a comprehensive blockchain-specific statute can solve these problems.