Legal Engineering on the Blockchain: 'Smart Contracts' as Legal Conduct

Jake Goldenfein and Andrea Leiter, 'Legal Engineering on the Blockchain: "Smart Contracts" as Legal Conduct' (2018) Law and Critique (Forthcoming).

15 Pages Posted: 24 May 2018  

Jake Goldenfein

Swinburne University of Technology - Swinburne Law School

Andrea Leiter

University of Melbourne, Law School

Date Written: May 10, 2018

Abstract

A new legal field is emerging around blockchain platforms and automated transactions. Understanding the relationships between law, legal enforcement, and these technological systems has become critical for scaling blockchain applications. Because ‘smart contracts’ do not themselves constitute agreements, the first necessary ‘legal’ development for transacting with these technologies involves linking computational transactions to natural language contracts. Various groups have accordingly begun building libraries of machine readable transaction modules that correspond to natural language contracting elements. In doing so, they are creating the building blocks for ever more complex transactions that will ultimately define the entire envelope of computational legal conduct in these environments, and likely standardise the field. However, also critical to emerging blockchain ‘legalities’, is the capacity for dispute resolution and legal enforcement. Beyond the performance of parties, or the quality of goods and services transacted, new mechanisms are also needed to address the performance of the computational transaction systems themselves. These are necessary to address the reality that smart contracts cannot be forced to perform actions beyond the parameters of their coding, even by a judicial order. Legal tools, both technological and institutional, are thus being developed to ‘soften’ the effects of self-executing transactions. In this article we treat these developments as law-making practices that are constitutive of an emerging legal field. Legal engineering exercises of this kind are not novel, and by drawing on historic examples from the common law and international arbitration, we gain insights into the competitive dynamics likely to be shaping legal engagements on the blockchain.

Keywords: smart contracts, blockchain, jurisdiction, legal theory, standards, dispute resolution, platform law, law and technology

Suggested Citation

Goldenfein, Jake and Leiter, Andrea, Legal Engineering on the Blockchain: 'Smart Contracts' as Legal Conduct (May 10, 2018). Jake Goldenfein and Andrea Leiter, 'Legal Engineering on the Blockchain: "Smart Contracts" as Legal Conduct' (2018) Law and Critique (Forthcoming).. Available at SSRN: https://ssrn.com/abstract=3176363

Jake Goldenfein (Contact Author)

Swinburne University of Technology - Swinburne Law School ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia

Andrea Leiter

University of Melbourne, Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria
Australia

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