scholarly journals SMART CONTRACT AND CHALLENGES TO LAW

2020 ◽  
Author(s):  
Gergana Varbanova ◽  

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.

Author(s):  
K. Nekit

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.


Legal Concept ◽  
2019 ◽  
pp. 54-60
Author(s):  
Nizami Safarli

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.


2021 ◽  
Vol 8 (2) ◽  
pp. 95-111
Author(s):  
Raluca Onufreiciuc ◽  
Lorena-Elena Stănescu

The research aims to organize, examine, and analyze the provisions on smart contracts available in Romanian civil law. “Smart contracts” are not smart, and are not necessarily contracts, although they can be. As self-executing computer programs, smart contracts are operational on the blockchain and unlike traditional legal contracts, once the agreement has been concluded and the smart contract is set in motion, no party can intervene and it will be executed without interruption, modification, or breach. The crucial question in the final contract law topic is what happens when the smart contract's outcomes deviate from those required by law. To answer this issue, we must first understand that whether a smart contract becomes legally enforceable is determined by several circumstances, together with the unique use case, the type of smart contract employed, and the existing legislation. The paper addresses the subject of determining and regulating smart contracts under Romanian current laws. Particular emphasis is placed on two ambiguous definitions of smart contracts: as computer code and as a civil-law contract. The authors conclude that the concept of smart contracts requires more legal regulation, particularly in terms of managing their meaning and comprehension.


2022 ◽  
pp. 112-131
Author(s):  
Andasmara Rizky Pranata ◽  
Pardis Moslemzadeh Tehrani

This chapter discuss the legality of smart contract in a decentralized autonomous organization (DAO). The regulation framework of blockchain is developing rapidly with many countries such as Malta and Estonia utilizing and allowing the use of blockchain. While many researchers have discussed the legality of smart contract, its relation to DAO as one of blockchain's applications is rarely discussed. There are three issues discussed in this chapter: the definition of DAO, the definition of smart contract, and the legality of smart contract in DAO. Each country has their own legal threshold of a contract's legality, but there are generally five elements in a legal contract, namely offer and acceptance, consideration, intention, certainty, and completeness. It is possible for the smart contract to fulfil the five legal elements of a contract. As there are different regulations in different countries, there may have been different elements to the law. In conclusion, the legality of smart contracts, like blockchain itself, depends on who uses it, where it is used, and how it is used.


Law and World ◽  
2021 ◽  
Vol 7 (5) ◽  
pp. 165-175

The article discusses about the smart contract, its concept and legal nature, as well as the place of smart contracts in the Technology Law, which means a discussion on the important issues covered by this topic. At the same time, smart contracts are com- pared to the usual standard contract, where their pros and cons are discussed. The importance and necessity of both types of contracts in relation to the current reality will also be discussed. At the same time, the article discusses about the revolutions – from where they begin and how long the world has passed before today's reality, why blockchain is considered as the fourth-generation revolution and how important it is to develop and implement it. The article also discusses about the types of contracts, which means how a standard contract can be divided, in the other words, we talk about consensual and real contracts. The definitions of each of them and their need related to the smart contracts are analyzed in the article. Therefore, we use the relevant chapters and articles of civil law to be able to explain what is meant and to what extent it is possible to follow the same norms in the case of the smart contract.


2016 ◽  
Vol 12 (1) ◽  
pp. 134
Author(s):  
Anna Triningsih

Law, as an justice institution run its functions through a specific process towards a certain direction in order to achieve justice. Justice now a days is needed as something concrete as the fulfillment of the most basic needs of the community. Law enforcement, in parliamentary life is run by the Government (the executive organs) and through the courts (judicial organ).There are different approaches in law enforcement. The rule of law in the Civil Law System which is shared by the countries in the European continent or land use law, also known as legal approach. In the Common Law System which is shared by the United Kingdom and the United Kingdom speaking countries, using the administration approach of the Administration, called the administration of justice. Implementation of the fundamental principles of the law, or because of its emphasis on the steps of a procedure in the event properly can make the law as an unrealistic myth, inefficient and far from the purpose of    the law and implies the occurrence of loss of trust from the community, while the basic principles of administration, because of its emphasis on the achievement of business objectives efficiently will have implications for the lack of certainty in law enforcement that is essential for the achievement of Justice for everyone. Besides that addition, it also can be an opportunity for the Court arbitrariness because discretion has its wide open room. Every Legal Approach has its own advantages and disadvantages. Making option to choose which legal approach as an appropriate and good policy in law enforcement is related to the characteristics and level of knowledge of the community also the environment where these law applied.


2021 ◽  
Vol 1 (1) ◽  
pp. 100-122
Author(s):  
Yuriy Truntsevsky ◽  
Vyacheslav Sevalnev

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.


2021 ◽  
pp. 104-111
Author(s):  
Alexander Matsegorin ◽  
Oleksandra Tsaryk

Problem setting. Due to the rapid impact of information and communication technologies on commodity-money relations, which are in the sphere of civil turnover in Ukraine, the number of contracts concluded in electronic form is significantly increasing. The scope of electronic documents both in contractual civil law relations and in general in the relations of individuals with government agencies, courts and other public law entities has a clear tendency to expand and grow. Thus, in many areas of commodity-money exchange, the interaction of executors and customers (clients) has reached a completely new organizational and legal level and is carried out exclusively online, because the territorial remoteness and implementation of quarantine measures against COVID-19 is not always possible to sign an agreement on paper. These statements determine the relevance of the chosen research topic. The object of the study is the civil legal relationship using a mobile digital signature (Mobile ID). The subject of the research is the advantages and disadvantages of electronic identification with the use of mobile digital signature in civil circulation. The state of research of the problem. Such scientists as M. I. Anokhin, Yu. V. Borodakiy, N. P. Varnovsky, V. M. Glushkov, M. V. Denisova, M. M. Dutov, A.V. Kobets, G.I. Kupriyanova, A. Matvienko, V. A. Onegov, I. A. Semaev, V. A. Shakhverdov, M. N. Tsyvin, V. V. Yashchenko and others. The target of research is to study the features of the legal regulation of electronic digital signature of a person and his legal status with the analysis of issues arising from the use of such a signature in civil turnover, the formulation of proposals for their solution. Article’s main body. The possibility of using mobile digital signatures in the document flow is provided by the relevant regulations. The Law of Ukraine “On Electronic Digital Signature” adopted on May 22, 2003, defines the legal status of an electronic digital signature and regulates the relations that arise when using an electronic digital signature. This Law does not apply to relations arising from the use of other types of electronic signatures, including digitized images of handwritten signatures. At the same time, the provision of Part 3 of Article 207 of the Civil Code of Ukraine on the use of facsimile reproduction of the signature by means of mechanical, electronic or other copying, as well as electronic signature or other analogue of handwritten signature with the written consent of the parties, which must contain samples handwritten signatures. The legislative base on electronic signatures is currently constantly growing, a passport of a citizen of Ukraine in the form of a card with a contactless electronic carrier (and an electronic digital signature) has been introduced into the continuum of indirect electronic reality. The Law of Ukraine "On Electronic Commerce" of September 3, 2015 regulates the legal regulation of the field of electronic commerce in Ukraine, defines the procedure for electronic transactions with the use of information and telecommunications systems. The legal basis for the provision of electronic trust services, including cross-border, the rights and obligations of the subjects of legal relations in the field of electronic trust services are subject to the Law of Ukraine "On electronic trust services" of October 5, 2017. The number of diverse legal material causes some difficulties in the practical application of a mobile digital signature. Differences in national terminology, which are contained in different sources, as well as existing legal gaps determine the relevance of this problem and require appropriate research. Conclusions and prospects for the development. The scientific novelty of the study is a comprehensive consideration of this topic, namely: the pros and cons of using a mobile digital signature, making suggestions for improving existing legislation with concepts and functions related to the use (Mobile ID).


Legal Concept ◽  
2021 ◽  
pp. 113-117
Author(s):  
Alexey Churilov ◽  

Introduction: the digitalization of public relations and the emergence of smart contracts have created the need to study what a smart contract is and whether it is subject to the general principles of the law of obligations. Methods: the methodological framework for the research is a set of methods of scientific knowledge, among which the main ones are the methods of historicism, consistency, and analysis. Results: the possibility of extending the principles of the law of obligations to the relations of the parties when they conclude a smart contract is analyzed. Conclusions: the conclusion is made about the extension of the principles of the law of obligations to smart contracts with the features due to the nature of smart contracts.


Author(s):  
Michael Casparus Laubscher ◽  
Muhammed Siraaj Khan

When Nick Szabo pioneered the idea of a smart contract in the 1990s, the economic and communications infrastructure available at that time could not and did not support the protocols needed to execute and apply smart contracts. While smart contracts may be viewed as an example of the use of blockchain and blockchain technology which offers great opportunities to the field of law; others are more sceptical. The use of smart contracts in law is anything but straightforward, but this should not deter jurists from investigating the opportunities this instrument offers. This chapter aims to provide an overview of smart contacts, explaining how they work, the ways they differ from written contracts, their legal status, and the advantages and disadvantages associated with using them. Finally, it identifies the main challenges facing businesses and the legal profession with regard to the expanding use of smart contacts.


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