scholarly journals Advantages and disadvantages of smart-contracts as the basis for the emergence of ownership

2021 ◽  
pp. 101-105
Author(s):  
K. Nekit
Keyword(s):  
Property Rights ◽  
Legal Aspect ◽  
Legal Regulation ◽  
Third Party ◽  
Smart Contracts ◽  
Advantages And Disadvantages ◽  
Technical Errors ◽  
Smart Contract ◽  
Legal Nature ◽  
Definition Of

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.

scholarly journals Smart Contract: The Concept, Legal Nature, Features of Conclusion and Execution

Legal Concept ◽  
2019 ◽  
pp. 54-60
Author(s):  
Nizami Safarli
Keyword(s):  
Russian Federation ◽  
Legal Regulation ◽  
Smart Contracts ◽  
Advantages And Disadvantages ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Legal Nature ◽  
Domestic Legislation ◽  
The Russian Federation ◽  
Statutory Regulation

Introduction: the paper is devoted to a new phenomenon in business activity in the conditions of IT development that contribute to the creation of secure contractual relations on the Internet on the basis of transactions executed through smart contracts. The author notes that the need for amendments that could fill the loopholes in the current legislation is obvious. And, first of all, it concerns Blockchain technology – the algorithm that mediates the safe development, conclusion and execution of smart contracts. Blockchain technology is considered in the paper as one of the safest means for concluding and executing smart contracts. The author argues that the study of the concept, legal nature and essence of smart contracts is relevant in the light of spreading their share in the total array of transactions in the world economy in conjunction with the changing domestic legislation governing the relevant sphere, as well as the international integration processes affecting the intensification of foreign economic activity of the Russian Federation. The smart contract concepts formulated by the Russian legislator in the process of upgrading the array of statutory regulation under conditions of economy digitalization are studied and compared. The features of conclusion and protection of the smart contract in the civil legislation of the Russian Federation are analyzed. In order to fully articulate the concept of the smart contract, reflecting its essence, functional purpose and legal nature, it is proposed to create a special law that would focus on the conclusion and implementation of “the smart contract” and the specification of the general norms of the civil code. At the same time, the norms of other special laws would supplement and correct the provisions fixed by this act depending on the sphere of managing and the legal regulation branch. The concept of the smart contract is formulated; its value for economic and contractual activity, and also the advantages and disadvantages of its application are established. The possible classifications of smart contracts are given.

scholarly journals Smart contract: from definition to certainty

2021 ◽  
Vol 1 (1) ◽  
pp. 100-122
Author(s):  
Yuriy Truntsevsky ◽  
Vyacheslav Sevalnev
Keyword(s):  
Social Relations ◽  
New Technologies ◽  
Theory And Practice ◽  
Information Support ◽  
Smart Contracts ◽  
Legal Definition ◽  
Advantages And Disadvantages ◽  
Smart Contract ◽  
Wide Range ◽  
Definition Of

The purpose of the present article is to gain an understanding of the opportunities and difficulties created by the introduction and development of the practice of network (smart) contracts. Our research methodology is based on a holistic set of principles and methods of scholarly analysis employed by modern legal science. It uses a dialectical method involving both general approaches (structural system method, formal logical method, analysis and synthesis of individual elements, individual features of concepts, abstraction, generalization, etc.) and particular methods (legal technical, systematic, comparative, historical, and grammatical methods, method of the unity of theory and practice, etc.). We analyze the views of lawyers and other specialists from Russia and abroad, legislative innovations in the field of digital technologies, the practice of blockchain-based smart contracts, and the main risks (whether legal, technological, operational, or criminogenic) of smart contracts for economic activities with a study of their causes. In the present-day situation, it is necessary to move from the legal definition of the smart contract and its legal and technological characteristics, advantages and disadvantages to the implementation of startups in a wide range of areas, especially business, public regulation, and social relations. Scholarly and information support for such processes will contribute to the development of industry, public administration and digital technology applications to improve the life of individual citizens and society as a whole. The introduction of smart contracts does not require the adoption of new laws or regulations. Instead, one should adapt and, possibly, modify existing legal principles at the legislative and judicial levels to pave the way for the use of smart contracts and other new technologies. The system of contract law provides a sufficient framework for regulating transactions without the introduction of any new legal categories. We propose approaches to the legal definition of the smart contract and identify a set of problems that must be solved at the legislative and technical legal levels in order to implement smart contracts effectively in different spheres of life.

SMART CONTRACT: CONCEPT, LEGAL REGULATION, ASPECTS OF CONSUMER PROTECTION

2021 ◽  
Vol 14 (4) ◽  
pp. 236-247
Author(s):  
IRINA VIKTOROVNA ERMAKOVA ◽  
◽  
◽  
Keyword(s):  
Social Relations ◽  
Legal Status ◽  
Legal Regulation ◽  
Fundamental Rights ◽  
Smart Contracts ◽  
Legal Norms ◽  
Legal Relationship ◽  
Smart Contract ◽  
The Subject ◽  
Definition Of

The subject of the research is legal norms aimed at regulating by law relations in the field of concluding and executing smart contracts, including issues of protecting the rights of the parties to such contracts, including consumers. The object of the research is social relations arising in the process of creating, concluding and executing of smart contracts. Particular attention is paid to the theoretical and practical aspects of the definition of the concept of “smart contract” and its essence, as well as its legal status. In addition, the article considers approaches to defining the essence of institutions that are closely related to the category of “smart contract”, such as “cryptocurrency”, “digital ruble”, “mining”. The aspects of the protection of fundamental rights of the parties involved in the considered legal relationship, including consumers, are also analyzed. Examples of court decisions regarding the corresponding category of cases are given. The novelty of the research lies in determining the current approaches in relation to the essence, concept and legal status of smart contracts, including the current position of law enforcement practice in relation to this issue. In addition, the novelty of the study lies in considering the practical aspects of the conclusion and execution of smart contracts, including, indicating examples of blockchain platforms on the basis of which smart contracts can function. Ultimately, the study led to the development by the author of some proposals in order to improve the relevant legislation. In particular, the author proposed to consolidate at the legislative level the legal definition of the concept of “smart contract”, indicating the appropriate wording.

scholarly journals Smart-Contracts in the digital economy: Contractual regulation and dispute resolution

2021 ◽  
Vol 2 (4) ◽  
pp. 40-50
Author(s):  
S. A. Sinitsyn ◽  
M. O. Diakonova ◽  
T. I. Chursina
Keyword(s):  
Legal Regulation ◽  
Self Control ◽  
Third Party ◽  
Physical Contact ◽  
Smart Contracts ◽  
Digital Platforms ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Materials Used ◽  
Automatic Code

This article has been prepared for the research purpose of identifying, disclosing, and justifying certain trends in the development of civil law and procedures in the context of the spread of smart contract practices and the expansion of their spheres of application. At the moment, there is no uniform approach to choosing an optimal form for the legal regulation of smart contracts within the system of contract law in modern legal systems or international law; meanwhile, globalization and the digitalization of the economy imply the growth of cross-border transactions. The emergence of smart contracts is due to the development of e-commerce, in which the parties’ interactions are carried out electronically instead of in physical exchanges or direct physical contact. Smart contracts gaining popularity in circulation are based on two interrelated elements: firstly, they eliminate a person’s direct participation in some or all cases of executing the agreement using an automated code designed for execution without reference to the intentions of the contracting parties after publication; secondly, they make use of decentralized blockchain technology, and also provide automatic code execution without any party’s potential intervention, so as to eliminate or reduce the self-control and third-party control of the commitment.This study examines the content, conclusion, validity, protection of rights and legitimate interests of the parties, interpretation, and legal nature of smart contracts. The research materials used foreign experience in resolving disputes from smart contracts on digital platforms (Kleros, JUR, Aragon Network Justice, OpenCourt, OpenBazaar), as well as domestic and foreign literature on smart contracts. This research has been prepared based on general (deduction, dialectical analysis, intersectoral relations of objects) and specialized (comparative-legal, economic-legal) methods of scientific experimentation.The authors conclude that there are no grounds for considering a smart contract as a new classification element of the system of contractual regulation (type or kind of contract). In addition, the analysis shows that the resolution of smart contract disputes through digital platforms remains radically uncertain, and currently is not creating obvious advantages in comparison with traditional judicial proceedings.

scholarly journals Išmaniosios sutartys: teisinis reglamentavimas ir jo problematika

2020 ◽  
pp. 122-144
Author(s):  
Emilija Bartkutė ◽  
Gabrielė Gumbytė
Keyword(s):  
Research Paper ◽  
Legal Regulation ◽  
Civil Code ◽  
Specific Form ◽  
Third Party ◽  
Smart Contracts ◽  
Smart Contract ◽  
Basic Functions ◽  
The Republic

This research paper deals with the Institute of Smart Contracts, reveals legal regulation and its problems. In the first part of the work, using the attributes: immutability, specific form and operation without third party mediation, and the basic functions of storing, validating and executing, the concept of smart contracts is revealed. Also, in order to fully disclose the exclusivity of these contracts, fundamental differences from automated transactions are discussed. In the second part – three contract institutes are distinguished, in the context of which the compatibility of smart contracts with the Civil Code of the Republic of Lithuania is assessed. First of all, it discusses the formation and its characteristics, in addition it is evaluated whether the formation of the smart contract violates the norms of the Civil Code of the Republic of Lithuania. Further, the exclusive execution of these contracts and their compliance with Chapter XVI of the Civil Code of the Republic of Lithuania is disclosed. Finally, the paper examines possible breaches of smart contracts, ways to resolve them, as well as customization and compatibility.

scholarly journals Legal regulation of smart contracts in France

2019 ◽  
pp. 151-158
Author(s):  
D. V. Chub
Keyword(s):  
Legal Status ◽  
Legal Regulation ◽  
Smart Contracts ◽  
French Law ◽  
Legal Doctrine ◽  
Economic Relations ◽  
Smart Contract ◽  
Legal Obligations ◽  
Characteristic Features ◽  
Definition Of

The paper is devoted to the legal regulation of smart contracts in French law. The question of the admissibility of the use of smart contracts in economic relations is considered. Particular attention is given to the French legal doctrine in the issue of formulating the definition of “smart contract” and identifying its characteristic features, the various points of view of French legal scholars are compared. Examples of the most effective use of a smart contract in economic relations are given. The problems of applying contractual legal obligations and obligations of French law to smart contracts are considered. The importance of the oracle for the implementation of the smart contract and the features of its legal status under French law are disclosed.

scholarly journals Problems of Smart Contracts Application in Transactions in Virtual Property

Lex Russica ◽  
2019 ◽  
pp. 108-118 ◽  
Author(s):  
E. E. Bogdanova
Keyword(s):  
Computer Code ◽  
Legal Regulation ◽  
Smart Contracts ◽  
Domain Names ◽  
Virtual Property ◽  
Smart Contract ◽  
Legal Nature ◽  
The Will ◽  
The Subject ◽  
The Moment

The author examines the features of the use of smart contracts in transactions in virtual property, taking into account the fact that the smart contract is a way of fulfilling those obligations in which the transfer of property provision takes place in the virtual world with the help of appropriate technical means. It should be recognized that the list of virtual property is open, at the moment it includes, for example, cryptocurrency, domain names, «game property», virtual tokens.The question of the legal nature of objects related to virtual property is relevant: are they a new independent type of property requiring special legal regimes, or are they a form of known property rights? The paper also notes that smart contracts differ in both vulnerabilities in computer code and insufficiently effective legal regulation. Smart contract, in the opinion of the author, is a kind of written (electronic) form of a contract, the peculiarity of which is that the will of the subject is expressed by means of special technical means in the form of program code. In this case, the will to conclude the contract simultaneously means the will to its execution upon the occurrence of certain conditions of the contract circumstances.In conclusion, the author shows that the automation of performance of obligations in particular and the digitization of contract law in general should not create obstacles to the implementation of the fundamental principles of good faith and contractual justice, to assess the proportionality of the distribution of rights and obligations of the parties, the equivalence of their property.

Trust but Verify: The Oracle Paradox of Blockchain Smart Contracts

2021 ◽  
Author(s):  
Abdullah Albizri ◽  
Deniz Appelbaum
Keyword(s):  
Internal Control ◽  
Process Management ◽  
Weak Link ◽  
Design Science ◽  
Science Research ◽  
Third Party ◽  
Smart Contracts ◽  
Independent Verification ◽  
Smart Contract ◽  
Control Application

Although research shows that blockchain provides fairly immutable virtual provenance workflows, proof that the Blockchain accurately represents physical events lacks truly independent verification. This dilemma, the Oracle Paradox, challenges blockchain architecture and is perhaps one reason why businesses have hesitated to adopt smart contracts. Blockchain proponents claim that people can serve as trusted Oracles in a smart contract. However, auditing research shows that people are the weak link in almost every internal control application, including those pertaining to blockchain. People are susceptible to collusion, bribery, error, and fraud and these tendencies are not entirely mitigated by blockchain technologies (Balagurusamy et al. 2019; Nakamoto 2008). This research proposes a framework to mitigate the paradox of the Oracle: A Business Process Management (BPM) model of a Blockchain Smart Contract-enabled Supply Chain with IoT as the sole "third-party" Oracle participant, utilizing Design Science research.

scholarly journals Legal status of cryptocurrency in Asian countries

2021 ◽  
Vol 66 ◽  
pp. 96-102
Author(s):  
V.M. Logoida
Keyword(s):  
Civil Rights ◽  
Government Regulation ◽  
Legal Status ◽  
Legal Regulation ◽  
Intangible Asset ◽  
Asian Countries ◽  
Legal Nature ◽  
Liberal Approach ◽  
Definition Of ◽  
Almost All

The article is devoted to the study of the experience of legal regulation of the legal status of cryptocurrencies and transactions with them in Asian countries (except for the People's Republic of China and Asian countries - members of the Commonwealth of Independent States, as the author examined them in separate publications). In the article the author, based on the study of regulations, administrative and judicial practice of all major countries in this part of the world, emphasizes the divergent trends in cryptocurrency transactions regulation in the region, when some countries move from a liberal approach to the use of cryptocurrencies to their total ban and vice versa. It is noted that almost all countries in the region give a legal assessment of the payment function of cryptocurrencies, using regulatory or prohibitive approaches, depending on the chosen policy, which indirectly confirms their understanding of the legal nature of cryptocurrencies primarily as a means of payment. At the same time, these countries not only categorically distinguish cryptocurrencies from fiat money issued by central banks, but also mostly avoid the official definition of cryptocurrency as private (decentralized) cash, preferring to qualify them as an intangible asset, virtual asset, digital asset, financial value and even a good or service, which is currently a kind of compromise between political expediency and economic realities. The author also notes that the Asian region is characterized by very active attempts to resolve the legal status of cryptocurrencies at the legislative level, and not just administrative or judicial response to the actual legal relationship, although the progress of different countries in this matter is different. As a result, the author concludes that in the Asian countries considered in the article, there is no same view on the legal nature of cryptocurrency, its qualification as an object of civil rights, and ways to regulate transactions with it (libertarian approach, positive-cryptocurrency approach but with detailed government regulation and control or a completely restrictive policy in relation to the cryptocurrency market).

scholarly journals SMART CONTRACT AND CHALLENGES TO LAW

2020 ◽  
Author(s):  
Gergana Varbanova ◽  
Keyword(s):  
Civil Law ◽  
Smart Contracts ◽  
Program Code ◽  
Advantages And Disadvantages ◽  
Smart Contract ◽  
The Law

Are the technologies advanced enough to replace lawyers and the judiciary in the negotiation and enforcement process? Is it possible for a program code to be a contract that binds the parties named in it? What is a smart contract and what challenges does it pose to the law? The present study aims to clarify and show the advantages and disadvantages of using smart contracts in civil law.

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