Contracting in the Age of Smart Contracts
43 Pages Posted: 16 Sep 2019 Last revised: 21 Apr 2021
Date Written: March 01, 2021
Smart contracts lie at the heart of blockchain technology. There are two principal problems, however, with existing smart contracts: first, the enforceability of smart contracts remains ambiguous. Second, smart contracts are limited in scope and capability barring more complex contracts from being executed via blockchain technology. Drawing from the existing literature on contracts and smart contracting, this Article suggests new approaches to address these two problems. First, it proposes a framework based on reliance-based contracting to analyze smart contracts. Second, the Article analyzes the seismic shifts in contractual disputes, and offers new insights into its features including decentralized decision-making, network-based dispute resolution, and extrajudicial enforcement of decisions. The Article concludes that users’ reliance should be the basis for analysis of smart contracts and its associated dispute resolution mechanism.
Keywords: Smart Contracts, Digital Contracting, Contract Theory, Dispute Resolution, Blockchain & Law, Fintech
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