We present a dispute resolution protocol that can be built on the Ethereum blockchain. Unlike existing applications, it is private by design through the use of zero-knowledge proofs. The protocol is resilient to Sybil attacks and provides increased collusion resistance amongst participating parties. A resolution to the dispute is guaranteed, whilst ensuring the users have the final say on the chosen resolution. The proposed protocol rewards stakeholders through a social incentive mechanism leveraging Soulbound tokens, and rewards agents who behave honestly, as opposed to favouring the wealthy. To our knowledge, this is one of the first dispute resolution protocols to implement governance through reputation as opposed to token-based voting. Furthermore, it is fully viable, given that all its necessary components are currently operating on the Ethereum blockchain.
This chapter discusses various aspects of agency, autonomy, control, and decentralization in the context of different organizations and institutions, such as state bodies, semi-autonomous organizations, private law-based organizations, and commercial companies. The definition of an agency varies based on the type of organization, its legal status, and its relationship with other organizations. The chapter also explores different forms of decentralization, such as territorial decentralization and technical decentralization, and the challenges that arise with each. The concept of Latour's chain of translation is introduced to describe the transformation of ideas through intercessors. The passage concludes by discussing the importance of institutional arrangements, constitutional and legal demands, political culture, and public values in determining the meaning of agency and its relationship with other organizations.
Georgios Birmpas, Philip Lazos, Evangelos Markakis, Paolo Penna
In this paper, we investigate the impact of reward schemes and committee sizes motivated by governance systems over blockchain communities. We introduce a model for elections with a binary outcome space where there is a ground truth (i.e., a "correct" outcome), and where stakeholders can only choose to delegate their voting power to a set of delegation representatives (DReps). Moreover, the effort (cost) invested by each DRep positively influences both (i) her ability to vote correctly and (ii) the total delegation that she attracts, thereby increasing her voting power. This model constitutes the natural counterpart of delegated proof-of-stake (PoS) protocols, where delegated stakes are used to elect the block builders. As a way to motivate the representatives to exert effort, a reward scheme can be used based on the delegation attracted by each DRep. We analyze both the game-theoretic aspects and the optimization counterpart of this model. Our primary focus is on selecting a committee that maximizes the probability of reaching the correct outcome, given a fixed monetary budget allocated for rewarding the delegates. Our findings provide insights into the design of effective reward mechanisms and optimal committee structures (i.e., how many DReps are enough) in these PoS-like governance systems.
Regulating cryptocurrency’s place in America’s most popular retirement savings vehicle generates thorny legal, ethical, and social justice dilemmas. Too little regulation could hurt those at highest risk of underfunded retirement. Too much could exacerbate existing racial, ethnic, and gender inequities. Though recent regulatory efforts suggest 401(k) administrators violate their fiduciary duty of care by offering cryptocurrency investment options to plan participants, the established fiduciary regime protects 401(k) plan participants from cryptocurrency risk while respecting their savings preferences. Yet, the current framework falls short of ethically and equitably serving all plan participants, particularly members of underserved communities— a problem largely unaddressed in academic, industry, or regulatory discourse. This Article demonstrates how regulators’ needlessly paternalistic approach toward cryptocurrency options could disproportionately impact minority retirement savings participation. Applying the existing fiduciary framework and practical mechanisms that plan fiduciaries currently use would minimize cryptocurrency risk to participants without rewriting the rules governing plan administration. This Article also proposes a novel, scientifically supported method by which fiduciaries should convey retirement planning information to improve retirement outcomes for all: via non-traditional media.
This note analyses the part on expropriation of the judgment of the International Court of Justice (ICJ, or the Court) in the case Islamic Republic of Iran v United States of America (Certain Iranian Assets).2 The case arose from various legislative and judicial measures taken by the United States against Iran that allegedly resulted in the breach of the United States’ obligations under the Treaty of Amity, Economic Relations, and Consular Rights (1955) (the Treaty of Amity).3 The ICJ found by 11:4 votes that the United States had violated the obligation under Article IV(2) of the Treaty of Amity that property of nationals or companies of the Contracting Parties ‘shall not be taken except for a public purpose, nor shall it be taken without the prompt payment of just compensation’. Four dissenting judges found that no taking had occurred. The Court found that no denial of justice had occurred. It stated that the Iranian entities had been able to contest the underlying measures, make submissions before US courts, lodge appeals and that there had been no ‘serious failure in the administration of justice amounting to a denial of justice’.4 The judgment raises two important questions in the context of an expropriation: what sort of illegality, if any, does it need to turn domestic court judgments implementing the amended US legislation into an expropriation and what is the role for regulatory powers in this context? The note commences with a review of the background of the dispute (Section II). It then addresses the judgment’s analysis (Section III) and proceeds to discuss two particular issues in the judgment in the context of expropriation, namely: expropriations involving domestic court judgments and regulatory powers (Section IV) before offering conclusions (Section V). The bilateral relationship between the United States and Iran has remained problematic ever since the 1979 Islamic Revolution. The United States considers Iran to be responsible for the 1983 bombing of the US military barracks in Beirut which led to the deaths of 241 US peacekeepers and injured many more and for supporting numerous terrorist acts against US nationals and the United States.5 In 1984, the United States declared Iran to be a ‘State sponsor of terrorism’ and inserted a ‘terrorism exception’ into its Foreign Sovereign Immunities Act (FSIA) in 1996.6 As a consequence, it was possible to successfully claim compensation for deaths and injuries resulting from terrorist acts sponsored by Iran or other States designated as ‘State sponsor of terrorism’.7 In 2002 the United States adopted section 201(a) of the Terrorism Risk Insurance Act (TRIA).8 This provision allows for the attachment of assets and execution of terrorism judgments for compensatory damages. This is possible against the assets of a State sponsor of terrorism and those of its agencies and instrumentalities, which have been blocked pursuant to a sanction regime. In 2008 the United States adopted section 1610(g) of the FSIA to enlarge the categories of assets that can be used for attachment and execution.9 In 2012, the US president issued Executive Order 13599. It blocked all assets of the government of Iran, including those of the Central Bank of Iran and of other Iranian financial institutions, where such assets were within United States territory or ‘within the possession or control of any United States person, including any foreign branch’.10 Furthermore, the United States adopted in 2012 the Iran Threat Reduction and Syria Human Rights Act. Section 502 of this act made assets of the Iranian Central Bank available for execution.11 As a consequence of these legislative and executive measures US courts have issued a number of default judgments and substantial damages judgments against the State of Iran and, in some cases, against Iranian State-owned entities. Further, the assets of Iran and of certain Iranian entities, including the Central Bank of Iran are subject to enforcement proceedings in various cases in the United States or abroad, or have already been distributed to judgment creditors.12 As a consequence, Iran sued the United States based on the compromissory clause in the 1955 Treaty of Amity. It alleged that among other provisions the United States had violated Article IV(2) which prohibits uncompensated expropriations. The United States only terminated the Treaty of Amity in October 2018 when the ICJ rendered its Order on Provisional Measures in the parallel 1955 Treaty of Amity case which is concerned with US sanctions.13 The United States objected to the jurisdiction of the ICJ and contested the unlawful expropriation claim on the ground that, inter alia, its actions were a legitimate exercise of its police powers. The United States invoked that they were aimed at providing victims of terrorist acts with the ability to obtain redress from the sponsors of those acts, including Iran.14 The United States’ jurisdictional objections were successful regarding the Iranian Central Bank. The ICJ decided that it does not qualify as ‘company’ under the Treaty of Amity. Therefore, a major part of the expropriation claim, namely the part concerning the assets of the Central Bank, was outside the jurisdiction of the ICJ.15 Concerning the rest, the Parties did not dispute that US courts had subjected the property and interests in property of Iranian companies to attachment and execution. Furthermore, there was agreement on the fact that such assets had been turned over or distributed to successful claimants in US court cases in which Iran was found liable. This happened without compensation for the affected Iranian companies.16 The ICJ’s analysis of the expropriation claim is brief (two pages). First, the ICJ states which assets are concerned.17 The United States objected against the inclusion of certain assets that were only distributed to the plaintiffs in US court cases after the termination of the Treaty of Amity.18 The ICJ decided that these funds could nevertheless be taken into consideration in the expropriation analysis since they were already affected by US court decisions pre-dating the termination of the Treaty of Amity.19 The Court declined to consider assets that Iran could not prove belonged to Iranian companies.20 It decided that it had to determine whether the attachment and execution of the property and interest in property constitute takings in violation of Article IV (2) of the Treaty of Amity.21 Pursuant to the second sentence of Article IV(2) of the 1955 Treaty of Amity: Property of nationals and companies of either High Contracting Party, including interests in property … shall not be taken except for a public purpose, nor shall it be taken without the prompt payment of just compensation. The ICJ stated that a judicial decision ordering the attachment and execution of property or interest in property does not per se constitute a taking or expropriation of that property. Two things are notable here: first, the Court equates takings and expropriations; second, the ICJ requires that an additional condition is fulfilled for a judicial decision so that it may amount to an expropriation, namely an element of illegality.22 The ICJ mentions two situations in which this will be the case: first a denial of justice, and second when a judicial organ applies ‘legislative or executive measures that infringe international law and thereby causes a deprivation of property’.23 The ICJ clarifies that it must examine the legislative, executive, and judicial acts adopted by the United States as a whole.24 It hereby differs from the suggested method of analysis proposed by the Unted States. The United States first explained why the Court should not consider the legislative and executive measures to be expropriatory25 and separately explained why the court decisions implementing these measures should not be an expropriation either.26 Concerning the requirements for a judicial expropriation, the ICJ did not rely on any case law or literature dealing with this issue. This was criticized by judge Bhandari in his declaration where he pointed out that the approach of the ICJ differed from a number of investment arbitration as as the case law of the Court of Human Rights The fact that the ICJ did not in its analysis on case law or literature have been by the approach of the in The United and to a number of investment arbitration in of the police powers concerning the of a judicial expropriation, the United States in its only states that of domestic courts in the role of and of should be separately from legislative and executive decisions not to a claim for The United States based this on State literature or case In its the United States only v and v of which are part of the of cases in which did not in the court proceedings as in dissenting criticized the of the judicial expropriation of the that the ICJ found a denial of justice nor a violation in the proceedings before US This was of the why against a violation of international law concerning the expropriation that it has to to the US measures as a the ICJ stated that the the of the of an to police powers in Article IV(2) of the Treaty of Amity. The Court that the to has been in international law and that exercise of certain regulatory powers by the government aimed at the of legitimate public is not or It for this to case from the the and investment The ICJ its on the police powers by out that powers in this are not the Court stated that it had already that the US measures and by US courts were measures in violation of the obligation under Article of the Treaty of Amity. Article of the Treaty of Amity in its second clause that High Contracting … shall from or measures that and interests nationals and companies of the other High Contracting the whether the US measures were and in breach of the the Court First, it decided that the in legislation were adopted for a public it found that there was an relationship between the and the it found the in to the Therefore, the Court decided by votes to that the United States has violated its obligations under Article of the Treaty of In the expropriation the pointed out that it had already that the legislative provisions adopted by the United States and by its courts were measures in violation of Article of the Treaty of on the the ICJ pointed out that is of the for a to be a regulatory and not an This of from the legislative provisions and judicial enforcement that the ICJ the for the exercise of regulatory powers had not been It found that the measures adopted by the United States to expropriation no compensation had been the Court found that the of the and the FSIA by US courts to takings without compensation in violation of Article IV(2) of the Treaty of to Executive Order the ICJ did not that an expropriation had since Iran had to the property or interests in property of Iranian companies that were Therefore, it found no breach of Article IV(2) of the Treaty in this in pointed out that that regulatory powers are not criticized the Court for not its only on to out the of a not compensation. stated that was not that the violation of Article of the Treaty of Amity to a violation of Article IV(2) of this criticized this of the Furthermore, at the regulatory to States by international courts and stated that it have been obligation to that the measures the that regulatory from In this was not in the case at and were of the that the US measures a of the regulatory powers for the of a legitimate public The United States to victims of terrorist with the to obtain to the ICJ found that a judicial decision ordering the attachment and execution of property or interest in property does not per se constitute a taking or expropriation of that property. This part of the judgment was among the This is in with the case law of investment which are in the of measures involving the as The has stated that in a dispute between concerning compensation provision of a judicial does not the under Article of the does not a to of property measures of the to measures from the or the a judicial decision into a judicial expropriation, the ICJ an element of It two a denial of justice or the by a judicial organ of ‘legislative or executive measures that infringe international law and thereby causes a deprivation of Furthermore, it decided that it must examine the legislative, executive and judicial acts adopted by the United States as a a denial of justice can turn a judicial act into an expropriation was dissenting was the fact that the court did not the to an of the judicial It adopted a of the of judicial expropriation when it decided that it must the for the judicial decision into consideration for the It out that its was not to the judicial The Court did so when it that a judicial act turn into an expropriation a judicial organ applies legislative or executive measures that infringe international if this causes a deprivation of Furthermore, it this part of the analysis by out that it had to examine the legislative, executive and judicial acts not separately as suggested by the United as a the on this judge Bhandari on this issue. criticized that the ICJ did not with the case law of investment the approach of investment to issues of judicial expropriation is by no This can already be by the used in the that judge Bhandari into to investment that domestic judicial decision must be by mentions denial of justice or other of international such as of or with In the he of investment The first that the domestic judicial decision must be by in the of a denial of justice or cases in this The second where he only a particular The which judge Bhandari to be a to a more In this context he The first concerned cases in which were at In v the found that a denial of justice had which led to a of a violation of Article In v the some element of or denial of In v the that for a judicial expropriation is unlawful by the court In v the of the decided that only a denial of justice could to a judicial In v the to in the dissenting only states that the claimants had alleged a of and of the court and that there was no for these Furthermore, the that judicial expropriations a did not this In the that the decisions of the Court did not have the of the of its investment and that no had occurred. In v the only case in second the element of and the The had alleged that a of assets amount to an The decided that the was a consequence of the default under the underlying The of cases in is from the cases so in of the cases in this the not in the of the v is such an In this the an expropriation claim in which the court of was The expropriation with the termination of an investment by the the decided to to the of the claimants and the from the actions were by courts and with the decision by court that the at a the found that was no that it of by the was not made with of Therefore, it decided that a expropriation had there was no on the part of the The from the acts of the executive and were only by the In this the did not a from the domestic court for the of an v case in the concerned a and its In the of a by a of a in the a president had to in the the of the over the with a of the first with and the to the and it to the courts the and that the agreement of the by was of these decisions and the found that the of in the an The did not between judicial and other of the State and the expropriation of the of any by the was of for the was that the the as of the after the by of the and to to the control to the v concerned the of the from it had the the of the was no The in its analysis concerning the of an expropriation to its on and It of a number of acts and that led to the decision of the that was by the The the State measures as act to It did not the of the acts of this act that it found to the the of a judicial expropriation the did not a denial of and did not discuss the of the court proceedings in the context of its expropriation in Bank v the decided that a denial of justice is not a for a judicial it found that decisions that the actions or of other of the State and which the of property or property can amount to The decided that the investment the actions of a number of among the High Court which for the of funds to a that did not have to these funds should have been used to a to the The the role of the High Court in this context when it stated that the had a judicial it is an amounting to failure of the actions and were only in a number of measures that the v is the only case in this where the expropriation was only by actions of the The found the acts of courts to be to international law and found that an expropriation had It found that a breach of the for the and of Foreign had The in pointed out that the courts had an of since the courts The of an can be in the case of a they jurisdiction to for with such … the for used by the courts and the in which the judge that to the an of In of these the in that the actions of the courts were to international and found that an expropriation had The in v which is not in the ICJ judgment or the dissenting for a It found that a court had an arbitration clause in a It that the to which it found to be a was not with the of the the decision of the Court of which it at all the cases so can a between those cases where only the actions and of a court the of an expropriation and where the acts of entities the in the first did in the court could be either in the domestic court proceedings or of international law when by the domestic when the of judicial takings judicial expropriation to those cases where the or of the deprivation in the of the judicial organ Therefore, to his the Iranian case not into the of judicial expropriations in which have to whether a domestic court a legitimate judicial decision or an does not that no expropriation has taken to those judicial expropriation only that it not be a judicial expropriation since it was not only by of the In this context it is important to note that the a number of investment adopted a of judicial expropriation in that it cases where a judicial organ applies ‘legislative or executive measures that infringe international law and thereby causes a deprivation of The is not whether an expropriation has taken whether it is a judicial Furthermore, it is that the Court decided that it must examine the legislative, executive, and judicial acts adopted by the United States as a This is in with those arbitration in which investment had to with cases in which the expropriation was not only by a domestic decision by a number of domestic to the In the Iranian the fact that the of legislative or executive measures the deprivation led to the whether the acts of the United States were by police powers. 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Abstract Smart contracts govern transactions using the blockchain as the enforcing medium. They may be a cheaper form of governance of transactions compared to traditional contracts, the hierarchy of firms, and relational contracts. However, I argue that smart contracts do not eliminate transaction costs; rather, they can increase them, particularly when considering the issue of ex‐post efficiency‐enhancing adaptation. Thus, while smart contracts offer a new theoretical and practical way to govern transactions, they are not without challenges and limitations.
This chapter examines the implications for law and regulation of the use of smart contract technology in insurance policies. It sets out the uses to which smart contract technology can be put and the potential benefits it brings to the insurer-customer relationship. These benefits include (i) the design of products that are more responsive to customer needs and (ii) prompter pay-outs upon the occurrence of a covered loss. The chapter demonstrates that a clear benefit of the technology is that it can respond to customer demand by ensuring clear outcomes upon the occurrence of a loss. However, the introduction of this technology can cause disruption to law and regulation in a number of ways, namely, disruption to legal doctrine, disruption to the regulatory environment, and disruption to specific regulatory objectives such as consumer protection. The chapter analyses disruptive tendencies and makes the following findings: (i) that both legal doctrine and the rules of conduct of business regulation may evolve in certain directions in response to the changes wrought by the introduction of the technology into insurance contracting; and (ii) that the regulatory environment will need to develop so as to simultaneously enable beneficial innovation and maintain proper safeguards for insurers’ customers. This chapter assumes the application of English law, but the principles of law considered are likely to have their equivalent in most jurisdictions with corresponding relevant implications for smart contracts.
Off-chain disputes regarding transactions executed on-chain are unavoidable. However, a prerequisite to effectively settling such disputes is the identification of the applicable law as well as of the competent jurisdiction. While some transactions merely operationalise off-chain relations between parties knowing each other, many result from interactions between pseudonymous individuals at unknown locations. The present contribution investigates the concrete consequences of pseudonymity on European Private International Law, especially principles to determine the applicable law. In this respect, it clarifies the numerous factors affecting the extent of pseudonymity, ranging from the type of distributed ledger on which the transaction occurred to the possible centralized intermediaries involved therein. The issue ought to be analysed having these factors in mind, as some effectively wither the veil of pseudonymity. Based on the preceding clarification, the contribution analyses the concrete extent to which pseudonymity renders some principles of European Private International Law ill-fit and as a result, difficult to apply in practice.
Bitcoin was launched in 2008 and appears as the first application of the blockchain technology. It remains, to date, the best known and the most used cryptocurrency. Like other cryptocurrencies, Bitcoin aims to become an alternative to State and multistate currencies, such as the Euro. The importance it has gained in practice over the past few years has grasped the attention of legal scholars, who tend to perceive Bitcoin as a challenge to traditional legal rules and therefore reflect upon the ways the latter can be applied to this technological new deal. Although these reflections concern, first and foremost, rules of substantive law, such as contract law, they also extend to Private International Law (PIL). From the latter perspective, Bitcoin raises two types of issues. The first one relates to the ability of PIL to tackle legal relationships involving the use of bitcoins, while the second one concerns the ways in which PIL rules can be implemented to these relationships. This article seeks to demonstrate that all the objections raised against the applicability of PIL to Bitcoin, whether they are based on the existence of an alleged non-State, self-regulated, legal order of the lex cryptographica, on the impossibility to situate legal relationships implying the use of bitcoins in the physical space, or on the pseudonymity of participants in the blockchain, can be overcome without having to introduce sweeping changes to PIL rules. Indeed, the latter rules can rather easily adapt to Bitcoin and grasp its hybrid nature of asset and of currency.
Abstract Smart contracts are designed to be self-executing and self-enforcing. They are written as computer code that can automatically monitor, execute and enforce the performance of the agreed terms. The code of smart contracts exists across a distributed, decentralised blockchain network, controlling the execution and making transactions trackable and irreversible. This article examines the extent to which the Australian Consumer Law unfair contract term provisions can respond to the use of smart contracts. The article finds that the Australian Consumer Law unfair contract term provisions work relatively well to protect smart contract consumers. While some challenges exist and should be properly considered, there seems to be no need to either create entirely new law, modify the existing regime or totally ban smart contracts to protect consumers against unfair contract terms in smart consumer contracts.
O presente artigo tem como objetivo definir, em nível conceitual, o fenômeno dos smart contracts a partir do referencial teórico de Hart (1983; 1994) quanto à significação de conceitos jurídicos, a fim de verificar sua sujeição às regras legais contratuais. Utiliza-se de método dedutivo e técnica de pesquisa bibliográfica para construir a logicidade interna e realizar o desenvolvimento conceitual dos smart contracts. Considerando o avanço do uso da tecnologia blockchain, a relevância desta análise está no fato de que a delimitação terminológica serve para justificar ou verificar a sua subordinação a normas jurídicas específicas e, portanto, capacidade de disrupção das normas jurídicas, a permitir desconstrução de lege lata e reconstrução de lege ferenda em linha com as funções decorrentes da inovação. O estudo conclui que um smart contract é funcionalmente similar a um contrato, e, portanto, deve ser considerado espécie de contrato para efeito de sujeição às normas contratuais. Adicionalmente, a conclusão indica ser importante que o sistema jurídico contratual considere esta nova espécie de contrato no desenvolvimento e evolução legislativos.
Abstract The paper draws a comparative analysis on the doctrine of mistake in contract law between common law and civil law traditions, to explore the legal implications and ramifications of blockchain technology, as one form of dlt , and smart contracting. The case of B2C2 Ltd v. Quoine Pte Ltd is instrumental in portraying how an actual legal dispute may arise in smart contracting relationships, whereby little to no human intervention exists. By comparatively analysing the two legal systems, one may understand better the judgments delivered by the courts in Singapore, the historical common law background leading to such a decision as confirmed also in appellate stage, the consequences such a decision may possibly have on the adoption of similar smart contracting arrangements, and the possible approach under a civil law regime. The conclusions pinpoint some crucial observations relating to the legal approach courts may adopt and their consequences on such contracting arrangements.
While the general employment of smart contracts has seen growing interest lately, its application in the legal domain raised several concerns . One of the main issues is that these contracts are often written in computer code, thus are difficult to understand for the average person: this could undermine their enforceability before national courts . \nThe present work proposes an approach for solving this lack of transparency: we shall compare and employ declarative programming languages that have already proven to bring helpful advantages when writing smart contracts , such as Logical English and LPS, both based on Prolog, as well as domain-specific imperative languages, such as Stipula , that allow for the codification of a smart legal contract both understandable for the average person and readable by the machine. \nWe will give an outline of the interplay between natural language and programming languages, and show how the lack of understanding reflects on the current employment of smart legal contracts. Fundamental to our reasoning will also be the distinction between B2B and B2C contractual relationships, where the EU principles of clarity and understandability of contract terms come into the picture. Moreover, we believe that uncertainty on whether the contract will execute the code as intended by the parties will negatively impact the trust that people place in such technology. \nWe will demonstrate a methodology for writing smart legal contracts in such a way as to improve both the understanding of their contents, by providing a direct transposition in code of the relevant clauses; and the intelligibility of their execution, by implementing the clauses directly, with no further coding required. This shall be done through Logical English, a programming language in which code is represented using a controlled form of the English language. Our intention is to showcase how to build trust in smart legal contracts, moving through a brief literature review of the proposed solutions, following with a demonstration of the drafting of the contract in a computable language understandable by legal experts and citizens alike. We shall utilize a running example to compare the methods we have applied, looking at the advantages, disadvantages and their effect on the overall explainability of the program. \nTo conclude, we shall compare our results with the desired effect on transparency and see how these may help the general goal of bridging natural language and computer code, especially as far as consumer contracts are concerned. We shall test whether it is possible for the consumer to contribute to the execution process, moving from the written text directly to the computable code, thus strengthening the connection between the contracts and the automation. To reach a common standard, and employ this technology in the legal field, it is necessary to link all parties more closely, be they businesses, consumers, or legal professionals, by providing a way for all to communicate directly with the Smart Legal Contract.
The emergence of smart contracts and the increasing integration of artificial intelligence (AI) have introduced new dimensions to traditional contract law. This research paper aims to explore the profound impact of smart contracts and AI on the foundations and principles of contract law. It examines the benefits, challenges, and legal implications that arise from the adoption of these technological advancements. By analysing relevant case law, scholarly literature, and regulatory frameworks, this paper provides insights into the potential transformation of contract law in the era of smart contracts and AI. This research paper aims to contribute to the ongoing discussion on the impact of smart contracts and AI on traditional contract law. By examining the benefits, challenges, and legal implications, it provides a comprehensive analysis that can inform policymakers, legal practitioners, and scholars in navigating the evolving landscape of contract law in the digital age.
The term “freeholder” was applied in the eighteenth century to the possessor of real property worth forty shillings or more. The most significant consequence of this status was the ability to vote (men only, of course). As Smith shows, the concept of the freeholder was central to “discourses of property, patriotism and independence.” Smith focuses on three writers of “partisan print” with divergent views on the nature of “relationships between individuals and the state”: Francis Atterbury, Joseph Addison, and Henry St. John, Viscount Bolingbroke. (It might have been interesting to assess all instances of “freeholder” in ECCO, but that would involve almost 5,000 hits.)For Francis Atterbury in the Address to the Freeholders of England (1714), the freeholder signifies “the good Englishman, whose property invests him in the nation.” He is “also intrinsically Tory” for Atterbury, who was making a “distraught attempt” to rally that party after the collapse of its ministry in the last years of the Queen. Atterbury’s detractors saw this as little more than what an anonymous pamphleteer called “the last effort of the Jacobite faction.”Joseph Addison responded to Atterbury with The Freeholder, which ran from December 1715 to June 1716. Writing at the time of an actual Jacobite rising, Addison stressed that while a freeholding gentleman was expected to be “personally aware and involved in the processes of politics,” he was also meant to be loyal to the (Hanoverian) king and the government of the day. Dissent of any kind was “rebellion or oath-breaking,” while partisanship was permitted “only . . . in support of the party in power at the time.” In terms probably more attractive today, Addison argued that holding land and the franchise should no longer be solely an inherited right of “the most ancient families,” but available to all who stumped up the necessary 40 shillings: “his periodical . . . actively encouraged the dissemination of property, claiming that it would bolster investment in the broader community.” Addison looked to Roman law to argue that reason and talent, rather than “privilege and primogeniture,” ought to be the basis of the rights associated with freeholding status. This helped with his related argument that “the king of England need not be of Stuart de[s]cent” (although the Georges were, actually).Bolingbroke, a former Jacobite and returned exile, countered in the late 1720s and early 1730s with his own conception of the freeholder in the Craftsman papers. His addresses to the freeholders of Britain espoused what Isaac Kramnick called the politics of nostalgia, based on an agrarian economy, “fundamentally anti-modern,” and opposed to party government and “the burgeoning growth of a fiscal military state based on public credit and insecure financial institutions.” Bolingbroke was anxious about the new non-landed commercial interests that Addison welcomed into the gentry. On the other hand, Bolingbroke argued that the freeholder’s stake in the system permitted—even demanded—active opposition as a civic and patriotic duty, certainly in response to the administration of Sir Robert Walpole. Britain needed “a proactive community of independent gentlemen prepared to resist the government in the name of the public weal,” a line of argument that made Bolingbroke attractive to independent gentlemen (and others) in the Thirteen Colonies a few decades later.Smith discusses all of this well, but there could perhaps be more about the subsequent history of his key term, beyond Christopher Wyvill’s Yorkshire Freeholder of 1780. This would not necessarily involve sifting through all those ECCO results, but there might be some good material buried there, at least among the 180-odd with “freeholder” in the title.Victorian biographer Aiken was famed, or perhaps notorious, for fulsome, methodical information about his subjects. He was not viewed, even in his lifetime, as an especially good biographer otherwise. In his Life and Works of John Arbuthnot (Oxford, 1892), he determined “to provide an illustrious family pedigree for his subject . . . [by] establishing a firm link between Arbuthnot’s ancestors of Aberdeenshire and the titled Viscount Arbuthnot of Kincardineshire.” This link was somewhat but not universally accepted as he began his research. Alsop shows how Aiken rejected or ignored questioning of the linkage both pre- and post-publication, refusing to respond to specific requests for proof for his position. Finally, in 1920 an amateur family historian, Ada Jane Arbuthnot, “established through patient scholarship the erroneous nature of Aiken’s scholarship.” Unfortunately, Aiken’s view on this issue and his general authority on such matters is still being accepted, as late as publications dated 1979 and 2004. 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A relatively recent phenomenon, smart contracts have slowly revolutionized the sphere of commercial transactions through faster, cheaper and automated means, by removing layers of unnecessary negotiation. A combination of law and coding, smart contracts have the potential to redesign our understanding of the basic doctrines of contract law. This article investigates the possible link which exists between smart contracts and the theory of detrimental reliance through the application of such contracts to certain age-old landmark cases, predominantly cited in the realm of contract law. It proposes the notion that issues pertaining to negotiation and miscommunication which have been the core matter of disputes in such cases, may have been easily avoided through an application of smart contracts, which compel enforcement at every stage. In particular, this article has explored the verdict of the jury in the matter of Pennzoil v. Texaco and construed that smart contracts have a key role to play even in instances of in-principle agreements. Further, this article has explored the possibility that, like any novel invention, smart contracts are not without their flaws and has examined the criticisms put forth regarding the applicability and adoption of such contracts, in certain instances. Finally, the author has concluded that a mechanism which would combine the strengths of both smart contracts and paper-based agreements is the need of the hour, to eliminate issues of ambiguity, enforcement and to permit the determination of more subjective legal criteria, as may be contractually required. Consideration, detrimental reliance, Pennzoil v. Texaco, promissory estoppel, smart contracts
This chapter argues that promoting and facilitating the use of smart contracts will require us to confront some basic questions concerning definitions, enforceability, and regulation. First of all, is there agreement on what a ‘smart contract’ is? Secondly, assuming that there is a working definition of smart contracts, can traditional contract law adequately govern them? Finally, even if the traditional law can do so, would we require regulation to ensure that their proper use? Ultimately, for smart contracts to become a reality of legal practice, we will require a balanced legal environment that gives a sufficient level of certainty about legal rights under such contracts.
Primavera De Filippi, Morshed Mannan, Wessel Reijers
Abstract Similar to the early days of the Internet, today, the effectiveness and applicability of legal regulations are being challenged by the advent of blockchain technology. Yet, unlike the Internet, which has evolved into an increasingly centralized system that was largely brought within the reach of the law, blockchain technology still resists regulation and is thus described by some as being “alegal”, i.e., situated beyond the boundaries of existing legal orders and, therefore, challenging them. This article investigates whether blockchain technology can indeed be qualified as alegal and the extent to which such technology can be brought back within the boundaries of a legal order by means of targeted policies. First, the article explores the features of blockchain-based systems, which make them hard to regulate, mainly due to their approach to disintermediation. Second, drawing from the notion of alegality in legal philosophy, the article analyzes how blockchain technology enables acts that transgress the temporal, spatial, material, and subjective boundaries of the law, thereby introducing the notion of “alegality by design”—as the design of a technological artifact can provide affordances for alegality. Third, the article discusses how the law could respond to the alegality of blockchain technology through innovative policies encouraging the use of regulatory sandboxes to test for the “functional equivalence” and “regulatory equivalence” of the practices and processes implemented by blockchain initiatives.
Innovations in technology have fast outpaced the rate of change in most legal system, and it is clear that innovation continues to develop at speed. The law is in an interesting phase of development as our courts and legislatures adapt to recognize and apply legal principles in such innovative contexts. B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 3(hereinafter ‘B2C2’) concerned trades relating to the sale by electronic market maker of the cryptocurrency. B2C2 is one of the first cases to consider issues of contract and trust law in the context of the trading of cryptocurrencies and contains interesting observations as to how the doctrine of mistake in common law and equity may apply to such contracts. The relief sought is also of interest, the primary relief sought by plaintiff was specific performance coupled with damages. SICC disagreed. Disputes involving disruptive technologies, such as cryptocurrencies and smart contracts, pose unique legal issues that are difficult to answer. It is important to monitor and influence developments about these issues.