Smart Contracts in Consumer Law: Does New Zealand Need to Wise Up?
34 Pages Posted: 9 Oct 2019
Date Written: October 9, 2019
Blockchain-based smart contracts represent a shift towards an automated world. While their immutable and self-executing nature present numerous economic benefits, these characteristics give rise to issues. One of these issues is that the burden of issuing proceedings changes from a party looking to enforce the agreement to a party who wishes to relieve themselves of an automatic enforcement mechanism. The ‘practical burden’, as the paper terms it, could potentially be most problematic in a consumer context, which is characterised by a significant imbalance between contracting parties. The paper assesses consumer law in New Zealand to determine whether this issue will arise under the current law. The paper concludes that New Zealand’s current consumer law is practically robust, however it recommends some practical measures that can be taken by the Commerce Commission in order to prepare for smart contracts as a dominant method of transferring property.
Keywords: Blockchain, Smart Contracts, Consumer Law, Consumer Lending
JEL Classification: K00
Suggested Citation: Suggested Citation