The term “smart contract”, coined essentially by technologists, has also entered the vocabulary of jurists a few years ago. Recently, even the Italian legislator has given a very first definition of “smart contract” within the art. 8-ter, d.lgs. 12.14.2018, n. n. 135, conv. l. 2.11.2019, n. 12. But what is meant by this expression and what sense does it make for a jurist to reason about this new conceptual category? This essay, in attempting to answer two fundamental questions, concludes in the sense that: 1) “smart contracts” are not agreements; notwithstanding in the wide spectrum of situations covered by “smart contract” there are, of course, also agreements concluded through algorithms, however, most of them are not contracts, but mere activities for the performance of obligations or, in any case, of already defined contractual provisions; 2) we must not confuse “smart contract” and blockchain; 3) the legal problems raised by the “smart contract” phenomenon require an analytical approach strongly conditioned by the technological ecosystem of reference and that must be calibrated in this case; 4) also for this reason, the category in question - as such, that is to say intended as a category - has substantially no legal relevance; 5) in any case, in consideration of the aforementioned technological conditioning, every attempt made by jurists to understand, and regulate the phenomena in question is, at present, likely to be obsolete at the moment in which it is carried out, which requires the lawyer to adopt an even more prudent and informed approach; 6) besides, the questions concerning the effectiveness of the c.d. smart contract, or those related to the consequent possible responsibilities, in practice, for many years, are normally managed by the IT systems involved without any recourse to the institutions and to the rules of the legal system, which, instead, when operating, are concentrated, for the more, in an attempt to avoid market distortions. The assumptions just summarized are confirmed by the observation of what happens in the financial markets, where the Algorithmic trading (AT) and the high frequency trading (HFT) are, from the end of the Nineties of the last century, a consolidated and constantly expanding reality.
Shares issued on a distributed ledger have already been designated as a future market standard. The potential of these dlt-shares is also acknowledged by the Swiss government, which has published a preliminary draft on the adaptation of federal law to developments in distributed ledger technology earlier this year. This essay focuses on various mainly private law issues related to the issuance…
Observing what happens in the most advanced economies in the world, it is considered possible to affirm that the technological anddigital transformation has two synonyms for the future: blockchain and smart contracts. These technologies allow the transfer of values,goods and rights without the control of the central institutions and in a totally automatic way. The verification, monitoring andauthenticity of these transactions are guaranteed by the blockchain itself. The objective of this essay, although still waiting for aregulatory intervention at the Community level, is to describe the most relevant technical, legal and juridical aspects of thesetechnologies, trying to understand, on the one hand, whether and how they could raise complications both with European and Spanishlegislation and, on the other hand, the effects that smart contracts applied to blockchain technology will produce in the immediate future.
In the rapidly developing cyber sphere dominated by cryptocurrencies and code, it is perhaps not uncommon for firms to focus on cutting-edge technological developments leaving the law behind as an ...
[excerpt] The concept of online dispute resolution (ODR) is not new. 1 But, with the advent of Web 3.0, the distributed web that facilitates pseudonymous and cross-border transactions via blockchain's distributed ledger technology, 2 the idea of, and pressing need for, appropriate dispute resolution models for blockchain-based disputes to support this novel system of distributed consensus and trust of which blockchain proponents boast, is a primary concern in rapid development. 3 The common goal of each project is to utilize smart contracts to facilitate "superior, quicker[,] and less expensive proceedings by eliminating so many of the tedious and protracted trappings of traditional arbitral proceedings, such as the sending and receiving of documents via courier.", Despite myriad approaches, all emerging blockchain-based dispute resolution services (BDR solutions) generally seek to bridge the divide between automated performance mechanisms, like smart contracts, and the human judgment traditionally required to settle legal disputes.5 How our existing legal frameworks must develop to ensure that smart contracts 6 facilitate, rather than frustrate, the parties' intent is a critically important question to ask as the blockchain stack's infrastructure and application layers are being built and, ultimately, scaled. Indeed, interest is high in the race to create alternative dispute resolution mechanisms to resolve disputes arising from blockchain-based commercial transactions that, due to the transnational, borderless, pseudonymous, and distributed nature of blockchain, clearly necessitate international solutions.7
La comparsa di nuovi fenomeni, sociali, politici ed economici interessa da vicino il mondo del diritto ed e` per tale ragione che i suoi studiosi si sono sempre confrontati con questi mutamenti, sforzandosi di comprenderli e interpretarli, tentando, ove possibile, di ricondurli nell’ambito dell’apparato giuridico gia` esistente. In particolare, una delle sfide piu` interessanti per il giurista, non solo dei nostri giorni (1), si e` sempre rivelata essere quella posta dall’avvento delle nuove tecnologie e dagli effetti che esse hanno sull’attivita` umana. L’incessante evoluzione del settore tecnologico, difatti, ha costantemente trasformato il nostro modo di (nascere) vivere (e morire) (2). Un evento senza precedenti, che ha trasformato la nostra in una societa` interconnessa e ha avuto un enorme impatto, tanto sui modelli imprenditoriali e industriali quanto sui diritti e le liberta` fondamentali, e` rappresentato dalla nascita della rete informatica, che ha prodotto e continua a produrre enormi cambiamenti nelle dinamiche dei rapporti umani a livello tecnologico, culturale, sociale e giuridico.
Smart contracts—contracts written into lines of code that automatically execute all or parts of an agreement—are a relatively new technology, which has raised many questions regarding their validity and formation. This Comment looks at smart contracts under the lens of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and analyzes what its provisions have to say on the validity and formation of a contract. This analysis is written from the internationalist perspective, which favors applying the CISG to issues it addresses even in cases where domestic law might apply. Moreover, this Comment argues that a smart contract used as an international sales contract, which embodies an entire agreement within its code, is valid under the CISG because it can meet the formation requirements of the Convention. More specifically, such a contract can show some clear indication of the parties’ intent, and include an offer, an acceptance, and some sufficiently definite indication of the goods, price, and quantity. In addition, smart contracts have the potential to promote international trade, an outcome that is consistent with the goal of the Convention’s creation. The purpose of this analysis is to address legal issues unique to smart contracts and to reduce legal uncertainty by filling an interpretational gap regarding the CISG’s applicability to smart contracts.
"Smart contracts...guarantee a very specific set of outcomes. There's never any confusion and there's never any need for litigation." ~JeffGarzik "If the blockchain promise comes to a reality...most goods, labor and capital will be allocated through decentralized global platforms. Disputes will certainly arise." ~ Clément Lesaege and Federico Ast Blockchain-based "smart" contracts may characterize much of the future of exchange as they expand the scope of potentially efficient bargains through restructuring and reducing transaction costs relative to traditional contracts. This Article analyzes the changes in transaction costs and execution efficiencies as contractual "distance"-the number of intermediaries required to make an exchange, weighted by the rational level of actual agreement between parties-increases between bespoke contracts, template contracts, contracts of adhesion, and algorithmic contracts housed on platforms like Ethereum and arbitrated on platforms such as Kleros. This framework shows that smart contracts have the potential to lower the contractual distance required to make an exchange by (1) overcoming trust issues that require intermediaries, (2) lowering the incentive to write certain kinds of boilerplate, and (3) increasing the incentive to understand contractual terms. As a result, wide implementation of smart contracts may return contract law closer to the legal ideal of mutual understanding as the basis for exchange. At the same time, these auto-executing agreements risk making the future of contract law a return to the era of sealed instruments, enforcing themselves regardless of impossibility, fraud, and other legal safeguards. As examples of these costs and benefits, the Article focuses on smart contracts in two industries: the environmental public goods sector and the film industry. These industries illustrate the potential for smart contracts as well as steps that can be taken to ensure that as code becomes law, it will retain the doctrinal wisdom applied to contracts before they became "smart."
Our study on smart contracts, self-executing agreements based on blockchain technology, can be placed in the field of inquiry within law and economics of contracts which explores new modes of contract enforcement as sources of market creation. We lay the foundations by characterising contract enforcement and trust mechanisms underlying contracts. Considering that trust reduces risks in economic exchange, we explain how the particular trust mechanism underlying smart contracts’ enforcement (no-party trust) provides opportunities for creating new markets and changing existing ones. We explore, among other things, whether using smart contracts could be a path to increasing the autonomy of consumers and offering a solution for democratising trade.
N. Sánchez-Gómez, L. Morales-Trujillo, Jesús Torres Valderrama
Immutability - the ability for a Blockchain (BC) Ledger to remain an unalterable, permanent and indelible \nhistory of transactions - is a feature that is highlighted as a key benefit of BC. This ability is very important \nwhen several companies work collaboratively to achieve common objectives. This collaboration is usually \nrepresented by using business process models. BC is considered as a suitable technology to reduce the \ncomplexity of designing these collaborative processes using Smart Contracts. This paper discusses how to \ncombine Model-based Software Development, modelling techniques, such as use cases models and activity \ndiagram models based on Unified Model Languages (UML) in order to simplify and improve the modelling, \nmanagement and execution of collaborative business processes between multiple companies in the BC \nnetwork. This paper includes the neccessity of using transformation protocols to obtain Smart Contract code. \nIn addition, it presents systematic mechanisms to evaluate and validate Smart Contract, applying early testing \ntechniques, before deploying the Smart Contract code in the BC network.
Smart contracts are the new norm, yet state legislatures and courts have not developed set rules and answers to legal disputes that these contracts create. Is traditional contract law sufficient? Or should we create an entirely new legislative or common law scheme to deal with these disputes? The common law has proven to be successful in dealing with new technologies and contracts, particularly because of its flexibility. Although a major overhaul may be in the future, there are still solutions that we can find today with the current legal landscape given the state of contract law and its evolution over time. One particularly analogous body of case law is instructive: the law of the vending machine. In the end, thinking about smart contracts as vending machines may be fruitful for the future of this evolving area of the law.