Contracting in the Age of Smart Contracts

43 Pages Posted: 16 Sep 2019 Last revised: 21 Apr 2021

See all articles by Farshad Ghodoosi

Farshad Ghodoosi

David Nazarian School of Business & Economics, California State University, Northridge

Date Written: March 01, 2021

Abstract

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

Suggested Citation

Ghodoosi, Farshad, Contracting in the Age of Smart Contracts (March 01, 2021). 96 Washington Law Review 51 (2021), Available at SSRN: https://ssrn.com/abstract=3449674 or http://dx.doi.org/10.2139/ssrn.3449674

Farshad Ghodoosi (Contact Author)

David Nazarian School of Business & Economics, California State University, Northridge ( email )

18111 Nordhoff St
Northridge, CA 91330
United States

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