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 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 AS A FORM OF CIVIL CONTRACT

2019 ◽  
pp. 15-20
Author(s):  
V. Varavka
Keyword(s):  
Information Technologies ◽  
Legal Status ◽  
Legal Regulation ◽  
Smart Contracts ◽  
Electronic Signature ◽  
Mathematical Algorithm ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Civil Contract ◽  
Legal Force

Development of information technologies, cryptocurrencies and technology of distributed networks has caused the appearance of smart con- tracts as new types of civil contract. They have been widely used in recent years in such areas as initial coins offering (ICO), financial sector, inter- national trade and public services. At the same time the legal status and legal regulation of smart contracts are uncertain. These uncertainties cause many legal risks of smart-contractsutilization. The purpose of this article is to find out the conception of smart contract as a form of civil contract, to research its legal status and legal regula- tion issues and to develop proposals for the improvement of legal regulation of smart contracts and cryptocurrencies in Ukraine. By its legal nature a smart contract is a digital form of a civil contract realized in programming code automatically executed in a distributed network. Like a civil contract, smart contract has such elements as parties, subject and essential terms of the contract. The legal force of a smart contract depends on whether it includes the fundamental features of a civil contact, such as evidence that parties have intention to create legal relations, understandabil- ity of contract conditions and possibility to perform the terms of the contract under duress. The main advantages of a smart contract are its ability to significantly accelerate and reduce costs of the transaction and guarantee the fulfillment of contract terms regardless of the contractual parties' and third parties' will. The main risks of a smart contract are uncertainty of legal status of a smart contract and cryptocurrencies as a means of payment, complexity of expressing the contact terms in a mathematical algorithm, risk of software bugs and hacking attack. To solve the problems of legal regulation of smart contracts in Ukraine it is necessary to change the legislation in order to settle the legal status of cryptocurrencies and recognize a smart contract as a form of a civil contract. It is necessary to identify parties of the smart contract, confirm their agreement on the terms of the smart contract by using digital electronic signature. A smart contract should be supplemented by text application containing the es- sential terms of the contract which will have legal force in trail. It is necessary to implement blockchain technology in the state registers and pro- vide legal ability to make adjustments in the registers automatically for the performance of smartcontracts.

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 RISKS OF SING DIGITAL TECHNOLOGIES IN BANKING

2019 ◽  
pp. 32-39
Author(s):  
V. M. Kamalyan
Keyword(s):  
Digital Technologies ◽  
Legal Regulation ◽  
International Standards ◽  
Smart Contracts ◽  
National Legislation ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Legal Risks ◽  
Proceeds Of Crime ◽  
Financing Of Terrorism

Based on the analysis of legal risks of using smart contracts in banking activities, the author concludes that there is a need for special legal regulation of the use of digital technologies in banking, which would minimize the legal risks examined in the paper. The author believes that such legal regulation in order to minimize legal risks should define a smart contract as a way of fulfillment of obligations rather than as a design of a contract concluded in writing. Analyzing the legal risks associated with the person identity during the introduction of digital technologies in banking, the author suggests the use of blockchain technology as the basis of the system of identification of customers using exclusively the advantages of this technology in compliance with the requirements of international standards and national legislation regulating counteraction to laundering of proceeds of crime and financing of terrorism. This solution will simplify and protect the system of identification and processing of data regarding the clients of banks, but it requires effective state support and legal regulation.

The Potential Of Blockchain Technology To Change International Mobile Roaming Business Model

2019 ◽  
Vol 5 (1) ◽  
pp. 15-22
Author(s):  
Ardian Thresnantia Atmaja
Keyword(s):  
Business Model ◽  
Current Situation ◽  
Business Value ◽  
Third Party ◽  
Fundamental Aspect ◽  
Clearing House ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Target Architecture ◽  
Architecture Development

The key objectives of this paper is to propose a design implementation of blockchain based on smart contract which have potential to change international mobile roaming business model by eliminating third-party data clearing house (DCH). The analysis method used comparative analysis between current situation and target architecture of international mobile roaming business that commonly used by TOGAF Architecture Development Method. The purposed design of implementation has validated the business value by using Total Cost of Ownership (TCO) calculation. This paper applies the TOGAF approach in order to address architecture gap to evaluate by the enhancement capability that required from these three fundamental aspect which are Business, Technology and Information. With the blockchain smart contract solution able to eliminate the intermediaries Data Clearing House system, which impacted to the business model of international mobile roaming with no more intermediaries fee for call data record (CDR) processing and open up for online billing and settlement among parties. In conclusion the business value of blockchain implementation in the international mobile roaming has been measured using TCO comparison between current situation and target architecture that impacted cost reduction of operational platform is 19%. With this information and understanding the blockchain technology has significant benefit in the international mobile roaming business.

scholarly journals Research on Blockchain-Based E-Bidding System

2021 ◽  
Vol 11 (9) ◽  
pp. 4011
Author(s):  
Dan Wang ◽  
Jindong Zhao ◽  
Chunxiao Mu
Keyword(s):  
Data Transmission ◽  
Privacy Protection ◽  
Graph Isomorphism ◽  
Third Party ◽  
Business Logic ◽  
Core Concept ◽  
The Core ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Bidding Process

In the field of modern bidding, electronic bidding leads a new trend of development, convenience and efficiency and other significant advantages effectively promote the reform and innovation of China’s bidding field. Nowadays, most systems require a strong and trusted third party to guarantee the integrity and security of the system. However, with the development of blockchain technology and the rise of privacy protection, researchers has begun to emphasize the core concept of decentralization. This paper introduces a decentralized electronic bidding system based on blockchain and smart contract. The system uses blockchain to replace the traditional database and uses chaincode to process business logic. In data interaction, encryption techniques such as zero-knowledge proof based on graph isomorphism are used to improve privacy protection, which improves the anonymity of participants, the privacy of data transmission, and the traceability and verifiable of data. Compared with other electronic bidding systems, this system is more secure and efficient, and has the nature of anonymous operation, which fully protects the privacy information in the bidding process.

scholarly journals Third Party Certification of Agri-Food Supply Chain Using Smart Contracts and Blockchain Tokens

Sensors ◽  
2021 ◽  
Vol 21 (16) ◽  
pp. 5307
Author(s):  
Ricardo Borges dos Santos ◽  
Nunzio Marco Torrisi ◽  
Rodrigo Palucci Pantoni
Keyword(s):  
Supply Chain ◽  
Mobile Application ◽  
Consumer Behaviour ◽  
Economic Incentives ◽  
Third Party ◽  
Smart Contracts ◽  
Proof Of Concept ◽  
Socially Responsible ◽  
The Public ◽  
Blockchain Technology

Every consumer’s buying decision at the supermarket influences food brands to make first party claims of sustainability and socially responsible farming methods on their agro-product labels. Fine wines are often subject to counterfeit along the supply chain to the consumer. This paper presents a method for efficient unrestricted publicity to third party certification (TPC) of plant agricultural products, starting at harvest, using smart contracts and blockchain tokens. The method is capable of providing economic incentives to the actors along the supply chain. A proof-of-concept using a modified Ethereum IGR token set of smart contracts using the ERC-1155 standard NFTs was deployed on the Rinkeby test net and evaluated. The main findings include (a) allowing immediate access to TPC by the public for any desired authority by using token smart contracts. (b) Food safety can be enhanced through TPC visible to consumers through mobile application and blockchain technology, thus reducing counterfeiting and green washing. (c) The framework is structured and maintained because participants obtain economical incentives thus leveraging it´s practical usage. In summary, this implementation of TPC broadcasting through tokens can improve transparency and sustainable conscientious consumer behaviour, thus enabling a more trustworthy supply chain transparency.

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 Discussion on Payment Application in Cross-border E-Commerce Platform from the Perspective of Blockchain

2021 ◽  
Vol 235 ◽  
pp. 03020
Author(s):  
Qian Liao ◽  
Mimi Shao
Keyword(s):  
Information Leakage ◽  
Consumer Information ◽  
Third Party ◽  
Cross Border ◽  
Blockchain Technology ◽  
Distributed Ledger ◽  
Smart Contract ◽  
Cash Payment ◽  
Asymmetric Encryption ◽  
Further Development

Features like the distributed ledger, consensus mechanism, asymmetric encryption technology, smart contract and Token of blockchain can lower transaction cost, enhance trust between customers and merchants, as well as eliminate false payment and consumer information leakage, problems which are common in current payment of cross-border E-Commerce platform. Based on the analysis of existing scholars, this paper studied two payment models: digital cash payment based on blockchain technology and the application of blockchain in third-party payment platform. Then the paper discussed the mechanism of blockchain in cross-border e-commerce payment platform, and creatively proposed a blockchain cross-border e-commerce payment platform, serving as reference and guidance for further development of blockchain technology in cross-border payment.1

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