Smart Contracts: (How) Do They Fit Under Existing Legal Frameworks?

Abstract

Smart contracts have the potential to increase commercial efficiency, lower transaction and legal costs, and increase transparency. They have a number of potential applications from the automatic payment of dividends, property transfers and automation of insurance claims to streamlining of clinical trials and more efficient data sharing. At the same time, lawyers and lawmakers have started to identify particular legal questions and concerns that arise in the context of smart contracts and distributed ledger technology. These include issues relating to enforceability of smart contracts, authentication of signatures, liability allocation, governing law, fraud risks and data protection. This article analyses these questions and provides practical solutions to address them.

Keywords: smart contracts, blockchain, digitisation, FinTech

JEL Classification: K