Smart Contracts: A Requiem

Abstract

"Smart contracts” are technologies that facilitate the generation and transfer of blockchain-based crypto-assets. The unfortunate labeling of these technologies as "contracts" has spawned a plethora of legal theories, which are built on unsubstantiated technical claims, terminological misunderstandings as well as on a general disillusionment with traditional institutions. Concepts such as “validation” or “self-enforcement,” both of which constitute permanent fixtures of the “smart contract” narrative, seem to have hijacked common sense with promises of certainty and guaranteed performance to the point where a structured and logical argument is rendered difficult. It is necessary to clarify the meaning of the term and remind those who debate the legal enforceability and validity of “smart contracts” of the basic principles of contract law. In particular, it is necessary to recall that contract law is indifferent to the manner parties express their agreement.

Keywords: smart contracts, blockchains, e-commerce, law and technology, cyberlaw

JEL Classification: K12, K22