The current research is devoted to the problem of the interpretation of the concept of consideration in Contract Law when applied to smart contracts executable on a blockchain. For these types of contracts, there exists a possibility where one of the key elements of a blockchain transaction, namely, gas payment, may, under certain conditions, qualify for the standard of valid consideration. Such a scenario may lead to a case where a gift from one contracting party to the other, executed via a smart contract on a blockchain, meets all the requirements for a contract - a situation that is impossible in Common Law jurisdictions since gifts are not recognised there as contracts precisely due to the 'lack of consideration'. The mentioned conundrum needs to be addressed. The current research describes this problem in detail, invites the audience to a debate and sets the directions for further discussions.
The article considers some aspects of legal regulation of smart contracts, which are becoming more and more relevant with the development of information technologies. The legislation and legal experience of foreign countries on conclusion and execution of "smart contracts" are studied in detail. As is known, currently there are several ways of integrating smart contract into transactions. The most relevant model of smart contract conclusion is the mixed model, the positive sides of using this form are analysed in the relevant provisions of the article. In its turn, the very legal nature of this type of contracts causes lively disputes in the civilistic environment, which is demonstrated by various opinions given in the article on the topic under consideration. There is no doubt that the widespread development of smart contracts in the near future can significantly help to reduce risks for the parties to the contract, exclude unscrupulous performers and suppliers from the market, as well as show a number of other advantages.
The article discusses the concept, main features and scope of smart contracts, and their relationship with traditional institutions of civil law. Smart contracts can find applications in almost all areas of life in the future. As is often the case with new technologies, the use of smart contracts also raises a number of law issues. Blockchain technology allows not only to create new means of payment, but also to autonomously manage almost any process. It can be used for individual contracts and even the creation of entire autonomous decentralized systems. In this regard, the main purpose of this study is to resolve the question of whether smart contracts are contracts in the legal sense, how they arise, how they should be classified according to the law of obligations, and what are the consequences of default. Against this background, the task of the author of this article is twofold. On the one hand, we are talking about the presentation of the main features of smart contracts in general terms, while, in addition to the advantages and functions, areas of application are of particular interest. After that, an attempt will be made to introduce smart contracts into civil law, which, in addition to the main issues of enforcement and contracting, will touch on some subsequent issues. As a result, it will become clear that civil law in general is well suited to smart contracts. However, there is some area of uncertainty, so additional legislative changes should be considered. To achieve the goal of the study, the author used empirical methods of comparison, description, interpretation; theoretical methods of formal and dialectical logic. Private scientific methods were used: legal and dogmatic and the method of interpretation of legal norms. The author comes to the following conclusions. Smart contracts are programs that carry out legally significant actions according to predetermined algorithms and are suitable for contractual relations. From a legal point of view, smart contracts can either be the subject of a contractual agreement, or generate it on their own.
Based on a systematic analysis of the general provisions of civil law on the forms of transactions, contracts and methods of performance of obligations, and doctrinal points of view on the essence of the smart contract as a product of digitalization conclusions are made that the smart contract has a complex and ambiguous legal nature, allowing to define it as a kind of electronic contract, a separate form of written transaction (contract), a way to fulfill an obligation. In the absence of its legal concept, it does not replace the traditional civil law contract. The subject composition and content of the smart contract is mediated by the scope of its application. We should not exaggerate the role and importance of smart contracts and expand the scope of their application outside of civil turnover.
The article is devoted to the features of protection the weak party in the situation when the parties to the banking agreement use the “smart contract” technology from the point of view of Russian and foreign doctrine. The author proposes particular changes and additions to the current regulation and the established judicial practice, while the general principles of legislation remain unchanged.
PERSPECTIVESOF“SMARTCONTRACTS”APPLYINGINRUSSIANLEGISLATURE The article is devoted to the perspectives of “smart contracts” application. The notion of ‘smart contracts’ and its general approaches are examined. Several legal issues concerning practical application of ‘smart contracts’ are mentioned. The author suggests amendments to the current legislature necessary for using smart contract in practice.
The emergence of cryptocurrencies and blockchain technology, the development of information technologies and international electronic commerce have led to the formation of a new type of civil law contracts, namely smart contracts. The use of mathematical algorithms in the implementation of smart contracts contributes to reducing the costs of organizing business relations, speeding up the implementation of agreements between business partners and increasing the level of security in the process of their cooperation. Investigating the issue of conclusion and implementation of smart contracts, its key elements are given, namely: the parties to the contract, who, on the basis of an electronic digital signature, agree or reject previous agreements; the subject of the contract and the availability of tools necessary for its implementation; an algorithm that accurately describes the conditions for executing a smart contract; a decentralized platform in which the algorithm of the smart contract itself is written, the algorithm in which the specific conditions for the execution of the smart contract are described. The article highlights the program-coordinating, protective, guarantee and security functions of smart contracts. The comparative characteristics of a smart contract with a civil law contract are given. The main advantages and disadvantages of the formation and implementation of smart contracts in Ukraine are grouped. The conclusion of smart contracts in Ukraine entails certain risks associated with the legal regulation of such contracts, in particular when determining their legal status. A technology for the development and signing of a smart contract as an innovative tool for contractual relations has been formed, which provides for the implementation of the following stages: determining business conditions and requirements for a smart contract, choosing a blockchain platform, selecting tools for developing a smart contract, developing a smart contract and auditing smart contract, deploying and signing a smart contract. Smart contracts are successfully used in various fields, such as: international settlements, securities transactions, banking, real estate, international e-commerce, recruiting, insurance, marketing and logistics, public and administrative services, agricultural sector, energy, medicine, etc.
Introduction: the article is devoted to the analysis of legal regulation of smart contracts, the concept, content, and scope of their application. The author analyzes in detail foreign expe- rience of using smart contracts and suggests possible options for expanding the application area. The article also has a separate section that looks at smart contracts as compared with traditional institutions of civil law. Smart contracts are expected to find application in almost all areas of life in the future. As is often the case with new technologies, the use of smart con- tracts raises a number of civil law issues. Blockchain technology makes it possible not only to create new means of payment but also to autonomously manage almost any process. It can be used for individual contracts and even for the creation of autonomous decentralized systems. Purpose: to provide an insight into the institution of smart contracts and define their role in civ- il law. Methods: empirical methods of comparison, description, interpretation; theoretical me- thods of formal and dialectical logic; special scientific methods such as the legal-dogmatic me- thod, the methods of interpretation of legal norms and comparative legal research. Results: smart contracts are computer programs that perform legally significant actions according to predetermined algorithms set out in the form of a so-called program code. In practice, they are especially important in connection with the development of blockchain technology or (more generally) distributed ledger technology. Conclusions: the term ‘smart contract’ was defined by Nick Szabo in the 1990s as a sequence of commands represented in digital form, including transaction protocols that execute these agreements. Thus, smart contracts formulate rules and sanctions for agreements and execute them automatically. These are not necessarily contracts in the legal sense, but they are capable of controlling, tracking, and documenting legally signif- icant actions. Smart contracts can also be implemented using traditional, for example, mechan- ical technologies (e.g. in a vending machine). However, blockchain and distributed ledger tech- nologies make it possible to implement incomparably more complex rules and enforcement me- chanisms and offer a decentralized environment with an integrated settlement system. From a legal point of view, smart contracts perform two functions. On the one hand, they serve as a functional equivalent of a contract since their technological code can identify the services to be exchanged as well as the conditions under which they must be provided. Being the normative order of the digital, this code formulates the program of obligations of the parties. It resembles the legal order of a contract, without necessarily coinciding with it. On the other hand, smart contracts serve as a tool for the execution of contracts – by controlling, monitoring, and docu- menting the exchange of services. They can also facilitate the execution of conventional con- tracts by translating their provisions into a technical code, verifying the occurrence of agreed- upon events, and enforcing contracts. Smart contracts are suitable for contractual relation- ships, for example, for processing payments or delivering goods without the participation of the parties and an intermediate step in the form of direct execution. Smart contracts are gaining more and more popularity, especially in the financial sector. In addition to the so-called token economy (cryptocurrencies, ICO, etc.), there are also discussed algorithmic ETFs, online plat- forms for loans or project financing. Another important area of application is sharing economy. From a legal point of view, smart contracts can either be the subject of a contractual agreement or generate it on their own. There is sometimes put forward a thesis under the motto ‘Code is law’ that smart contracts give rise to a largely autonomous legal system and/ or are not subject to applicable law. However, this appears to be an erroneous conclusion
Цифровая трансформация строительной сферы является одним из ключевых направлений государственной политики в России. Данное обстоятельство обуславливает актуальность выбранной темы. В статье предложено внедрение технологии смарт-контрактов для регулирования взаимоотношений между участниками инвестиционного процесса в жилищном строительстве. Внедрение данной технологии позволяет автоматизировать весь документооборот, в том числе связанные с условиями оплаты сделок между участниками. Также смарт-контракты подразумевают уменьшение числа вовлеченных людей; полную прозрачность ответственности и бюджета; способствуют повышению эффективности взаимоотношений всех участников договора в условиях цифровой трансформации национальной экономики. The article proposes the introduction of smart contract technology to regulate the relationship between participants in the investment process in housing construction. The introduction of this technology allows you to automate the entire workflow, including those related to the terms of payment of transactions between participants. Also, smart contracts imply a reduction in the number of people involved; full transparency of responsibility and budget; contribute to improving the effectiveness of relationships between all parties to the contract in the context of digital transformation of the national economy.
Smart contracts offer a unique method of contracting that differs from the methods used for a long time in this regard; Because the agreement between the contracting parties appears in the form of a code that is run and executed by members of the Blockchain network or the nodes, without one of the parties being able to stop it; so that when a certain condition is met and the members of the network verify that, the related or the corresponding condition is executed automatically; therefore it's a contracting method that guarantees the process of contracts performance in the manner agreed upon, without the need to have a confidence in the other party or resort to a trusted body to verify the truth of that party or the object of contract; so we thought about studying the topic of the conclusion of those contracts in order to highlight their features and clarify the extent to which general rules accommodate the specificities of their formation; and we divided our research into an introductory section entitled "the fundamentals of block chain technology", and two main sections; the first entitled "the idea of smart contracts as a blockchain application", and the second entitled" specificity of smart contracts formation. Keywords: smart contracts, blockchain, DApps, Ethereum.
The article examines the concepts, legal nature of smart contracts, as well as the advantages and disadvantages of smart contracts as a basis for ownership. The technical and legal aspect of the concept of smart contract is considered. Models of using smart contracts are described. Approaches to determining the legal nature of smart contracts are presented. It is concluded that two models must be considered when using smart contracts. The first model is external, when the program code does not replace the agreement, but only automates its execution. The second model is internal, when the code completely or partially replaces the terms of the agreement. Among the advantages of smart contracts as grounds for the emergence of property rights can be identified, first of all, the inability to change the terms of the contract and interference in its work. However, at the same time, this feature is a disadvantage of the smart contract, as it does not allow to take into account the objective circumstances that may affect the implementation of the agreement. The problem of oracles when using smart contracts is also considered. It is noted that the use of oracles actually means the involvement of a third party in the transaction with all the risks that arise from it. The problem of involving notaries and state registrars in transactions on acquisition of property rights on the basis of a smart contract is analyzed. The problems of lack of legal regulation of smart contracts, in particular, related to its transnational nature, is investigated. The problem of protection of the rights of the parties to the smart contract is analyzed, in particular, related to technical errors and outside interference. Temporary solutions regarding the use of smart contracts and general recommendations on the legislative definition of smart contracts are proposed.
The article defines the theoretical and legal content of the category of "reasonable contracts", outlines the concepts and basic forms of implementation of contractual obligations without enforcement. Based on the modern global paradigm of legal development, smart contracts are defined as contracts that are technologically secured in such a way that allows the parties to guarantee bilateral performance of contractual obligations without recourse to enforcement means, including judicial protection of violated right. It is noted that such a definition requires inclusion in the current civil and economic legislation, taking into account the actual existence in public relations of such contracts in the form of vending machines and other technically possible practical forms and models, as well as taking into account the real possibility of reducing the hypothetical costs of the parties to the contract for judicial consideration of the case. It is determined that in the context of modern social processes, self-help is not a fundamentally new phenomenon, since people regularly act independently before referring to the official legal system. So, over the past few years, a group of innovators have begun to develop computer technologies that have led to the emergence of a fundamentally new area of legal regulation in contract law, such as so-called "reasonable contracts" or smart contracts. From a teleological point of view, their purpose is to allow the parties to such a contract to ensure that they have reached an agreement to increase the cost of any violation by an appropriate amount. Smart contracts are defined as agreements in which conditions are executed automatically, usually using computers. Such contracts are intended to ensure execution without going to court. Automation ensures productivity by eliminating the human factor from contract execution. One example of a smart contract is a vending machine. If the machine is working properly and money is inserted into the machine, this will automatically execute the purchase and sale agreement. It is noted that such a contract does not create any legal problems if the machine will issue soda or coffee, but legal issues arise if the machine can issue, for example, narcotic drugs. So, there is a problematic question of the legality and expediency of legislative prohibition of such automatic means due to the theoretical possibility of their use for illegal purposes, or, conversely, their legalization and normalization by the requirements of current civil legislation.
Abstract Various states have started providing private law frameworks for blockchain transfers and crypto assets. France and Liechtenstein have adopted the first acts, while a commission of the British government sees no difficulties in extending property protection under the common law to crypto assets. In the USA, an amendment to the Uniform Commercial Code has been suggested, which has not stopped some states going their own, different way. The aim in all cases is to promote the use of modern distributed ledger technology and enhance investor protection. While these initiatives will increase legal certainty, they differ significantly. This has an important downside: there is a strong risk that the blockchain will be made subject to diverging legal rules. Similar to the world of intermediated securities, various national laws will need to be consulted to determine the rights and privileges of investors. This may increase transaction costs, thwart interoperability, and produce thorny conflict-of-laws problems. Markets risk being fragmented into national segments, with an inevitable diminution of their depth and liquidity. As a remedy, this article suggests developing uniform rules for the blockchain. Before national legislators and judges once again divide the world through idiosyncratic rules, the private law of crypto assets should be harmonized to the highest degree possible. Uniform rules should ideally be forged at the global level, by fora like the International Institute for the Unification of Private Law (Unidroit), the United Nations Commission on International Trade Law (UNCITRAL), and the Hague Conference on Private International Law. In the absence of worldwide rules, uniformization of private law should take place at the regional level—for instance, by the European Union. The article makes specific suggestions as to how this can be achieved and what the content of those rules should be.
This paper is intended to serve as an introductory treatise on the subject of smart marriage contracts (SMC) as a manifestation of blockchain in matrimonial property law of contracts. It starts with a description of the origin and functioning of an SMC from a technical standpoint, while evaluating the legal nature thereof at the same time. Afterwards, we focus on the possibilities and means of an SMC’s establishment under German, Austrian, and Slovak law. Moving on, issues related to the content of a marriage contract establishing an SMC are examined. Then it is tested the permissibility of an SMC-related provision in a marriage contract referred to as a “registration clause”. Finally, it is delved into the question whether the appearance of an SMC in a marriage contract introduces any peculiarities to issues of private international law, namely from the perspective of the EU Regulations on property regimes of international couples.
Ирина Владимировна Сазонова, Vladlena S. Mazhaeva, Alexandr A. Potkin, Marina A. Kuznetsova
The evolution of digital technologies leads to a tectonic transformation of all spheres of society. Law, as a system of regulating public relations, is changing dynamically along with the development of public relations in different spheres. The development of IT led to the emergence of blockchain technology, which, in turn, became the basis for the development of smart contracts. Smart contract technology, as it develops, causes changes not only in the legislation, but also in the model of interaction between the state and business. Due to smart contracts, a significant part of the rules can be algorithmized, and the regulation can become machine-readable. Purpose of the research: Legal research of the current legislation, the synergy of business, law and economy in the implementation of smart contract technology, determination of theoretical concepts in relation to smart contracts, the content and problems of the application of smart contracts, and identification of the most significant proposals for improving legislation. Methods: The authors of the research used general and specific scientific methods. In the study of the technological foundations of the smart contract, the main methods were analysis, synthesis, analogy, and a system-structural approach.
Marina Kasatkina* Consumer Protection in the Light of Smart Contracts DOI: 10.54148/ELTELJ.2021.1.95 Abstract This article aims to evaluate how common forms and methods of protecting the rights and legitimate interests of consumers are applicable in the area of smart contracts. The author highlights the potential negative effects of smart contracts on consumer protection. In this […]
Одним из условий договора аренды в предпринимательстве, если одной из сторон выступает юридическое лицо, является письменная форма. Для признания смарт-контракта заключенным в письменной форме, необходимо наличие условий оферты и акцепта. В данном случае офертой будет выступать предложение заключить договор аренды через смарт-контракт (например, через приложение у номера в отеле, после оплаты которого стороне приходит пароль или выдается ключ от номера с электронным замком, подключенным к сети интернет) и акцепт. Данный способ чем-то напоминает заключение договоров розничной купли-продажи в вендинговых автоматах. Термин происходит от английского глагола «to vend» - продавать, торговать. В настоящее время в юридической и экономической терминологии «вендинг» используется для обозначения особого вида торговой деятельность, а именно - торговли через специальные автоматизированные устройства (торговые автоматы). Также необходимы конклюдентные действия, но основное отличие кроется в том, что для договора аренды, построенном на смарт-контракте необходима ЭЦП стороны и связь системы с интернетом, чтобы информация была внесена в соответствующий реестр данных, была создана новая цепочка блоков. Кроме того, цепочка блоков в смарт-контракте намного сложнее, чем при вендинге. Применение смарт-контракта и интернета вещей кроет в себе также большое количество плюсов, но и недостатков. Существенным является вопрос, связанный с финансовой частью, безопасностью и конфиденциальности. В первом случае, в связи с отсутствием широкого распространения таких отношений -стоимость их оформления в системе смарт-контракт будет колоссальна. One of the conditions of a lease agreement in an enterprise, if one of the parties is a legal entity, is a written form. To recognize a smart contract as concluded in writing, it is necessary to have the terms of the offer and acceptance. In this case, the offer will be an offer to conclude a lease agreement through a smart contract (for example, through an application near a hotel room, after payment of which the party receives a password or a key to a room with an electronic lock connected to the network internet) and acceptance. This method is somewhat reminiscent of the conclusion of retail sales contracts in vending machines. The term comes from the English verb "to vend" - to sell, trade. Currently, in legal and economic terminology, "vending" is used to denote a special type of trading activity, namely, trading through special automated devices (vending machines). Concrete actions are also necessary, but the main difference lies in the fact that for a lease agreement built on a smart contract, the EDS of the party and the connection of the system with the Internet are required for the information to be entered into the corresponding data register, a new block chain was created. In addition, the blockchain in a smart contract is much more complex than in vending. The use of a smart contract and the Internet of Things also has a large number of advantages, but also disadvantages. Financial, security and privacy issues are essential. In the first case, due to the lack of widespread distribution of such relations, the cost of their registration in the smart contract system will be colossal.
Поднимая вопрос о месте смарт-контракта в экономико-правовой сфере, также нельзя не упомянуть об основных экономико-правовых положения и то как они адаптируются применительно к смарт-контрактам в предпринимательстве и какими особенностями обладают. Характерными принципами, применяемые к смарт-контрактам в предпринимательстве, относятся: судебная защита, добросовестность, защита слабой стороны, свобода договора. смарт-контракт хоть и предполагает защиту интересов слабой стороны, но это прежде всего компьютерная программа, подчиняющаяся определенной логике и цель, которой является определенность и эффективность выполнения запрограммированных условий контракта. И совсем избежать участие посредников, таких как суд (в случае возникновения и необходимости разрешения споров) при использовании смартконтрактов не получится, каким бы иным образом это не описывалось в работах других правоведов. Смарт-контракт не предполагает защиту слабой стороны отношений, поскольку его основная цель это автономность и самоисполнимость условий договора. Raising the question of the place of a smart contract in the economic and legal sphere, one cannot fail to mention the main economic and legal provisions and how they are adapted in relation to smart contracts in entrepreneurship and what features they have. Typical principles applied to smart contracts in entrepreneurship include: judicial protection, good faith, protection of the weak side, freedom of contract. A smart contract, although it presupposes the protection of the interests of a weak party, is primarily a computer program that obeys a certain logic and a goal, which is the certainty and efficiency of fulfilling the programmed contract conditions. And completely avoiding the participation of intermediaries, such as a court (in case of arising and the need to resolve disputes) when using smart contracts, will not work, no matter how otherwise it is described in the works of other legal scholars. A smart contract does not imply the protection of the weak side of the relationship, since its main purpose is the autonomy and self-enforcement of the terms of the contract.
На сегодняшний день в российской и зарубежной практике как учеными, так и законодателями выделяется несколько подходов к пониманию смарт-контрактов в предпринимательской деятельности. Чаще всего смарт-контракт определяют через: компьютерную программу или компьютерный код; гражданско-правовой договор; особую форму договора; способ исполнения обязательств; способ обеспечения исполнения обязательств. В соответствии с законодательством Аризоны, «смарт-контракт определяется как программа, активирующуюся происходящими событиями и действующая в распределенном децентрализованном многопользовательском воспроизводимом реестре и умеющая управлять и передавать активы в реестре». Смарт-контракт - программный код, предназначенный для функционирования в реестре блоков транзакций (блокчейне), иной распределенной информационной системе в целях автоматизированного совершения и (или) исполнения сделок либо совершения иных юридически значимых действий. To date, in Russian and foreign practice, both scientists and legislators distinguish several approaches to understanding smart contracts in business. Most often, a smart contract is defined through: a computer program or computer code; civil contract; a special form of contract; way of fulfilling obligations; method of ensuring the fulfillment of obligations. In accordance with Arizona law, "a smart contract is defined as a program that is activated by events and operates in a distributed decentralized multi-user reproducible ledger and is able to manage and transfer assets in the ledger." A smart contract is a program code designed to function in the register of transaction blocks (blockchain), another distributed information system for the purpose of automated execution and (or) execution of transactions or other legally significant actions.
The articles focuses on opportunities and problems connected with implementation of smart contracts into “over-the-counter” derivatives trading. The importance of success of professionals who work on this cannot be underestimated: the volume of “over-the-counter” derivatives market is huge, its automatization and transparency provided by implemented smart contracts could dramatically increase its economic efficiency. In this study, the author aims at answering the following question: what aspects of “over-the-counter” derivatives trading could take a quantum leap because of the implementation of smart contacts and, per contra, what aspects could not benefit from implementation of underlying technologies at all. The author starts with the overview of “over-the-counter” derivatives market, investigates the matter of its internal design, main features and the structure of legal documentation used by market participants. Then the article provides the analysis of smart contract phenomenon, summary of its engineering aspects and difficulties connected with the implementation of smart contracts as a practical matter, including underlying legal issues. The third part is a synthesis of ideas indicated in previous parts. Herein the author examines the perspectives of adoption of smart contracts in “over-the-counter” derivatives trading, identifies the problems that cannot be resolved yet: different parts of legal relations existing between market participants shall be structured in a flexible way and shall be subject to revision under specific conditions. Smart contracts in their turn cannot be considered as a flexible tool and the revision of their terms requires the input from highly experienced specialists that dramatically increases the costs of their implementation and maintenance. As a matter of conclusion, the author gives recommendation to potential developers of smart contacts to implement them only in relation to the automatization of payments and deliveries as at the moment the clearing can be considered as the most appropriate area for the implementation and use of smart contracts.
Digital transformation affects almost all areas of government management, including public procurement. World experience shows that the procurement sector acts as a driver of digital transformation of corporations. According to the authors, digitalization of public procurement should not be an end in itself, a balanced approach is needed to make the contract system more open, accountable to citizens, convenient for business, cost-effective and anti-corruption. Currently, there have been significant changes in the public procurement system in the direction of its electronicization, electronic platforms, electronic stores for small purchases have appeared, all competitive procurement methods have switched to electronic format. The next stage in the development of the contract system is digitalization due to the transition to smart technologies, including blockchain, smart contracts, cloud services, artificial intelligence, bigdata. The purpose of this article is to show how digital technologies, including those successfully used in corporate procurement, will help move to state “procurement 4.0” and lead to the formation of an intellectual contract system, including eliminating the influence of the subjective “human” factor as much as possible, by transferring the collateral function making managerial decisions to artificial intelligence.