Bot Contracts

26 Pages Posted: 19 Mar 2020 Last revised: 19 Dec 2020

See all articles by Deborah R. Gerhardt

Deborah R. Gerhardt

University of North Carolina School of Law

David Thaw

University of Pittsburgh - School of Law; University of Pittsburgh - School of Information Sciences; Yale University - Information Society Project; University of Pittsburgh - Graduate School of Public & International Affairs

Date Written: November 10, 2020


In this Article, we explain why the transactions commonly known as “smart contracts” are better understood as “bot contracts.” Taking an interdisciplinary approach, we show why the “smart contracts” moniker is mis-descriptive in two important ways. First, these transactions are automated, not “smart.” Second, they do not afford parties many enforcement rights and defenses that one expects from common law contractual relationships. To fully understand these transactions, it is important to appreciate how the term “smart contracts” differs from the what the technology delivers. Our review of the technology explains that these transactions have tremendous practical utility in reducing risk and avoiding the uncertainty and expense of seeking judicial enforcement. However, the electronic processes that occur in this category are not smart, in the sense of being thoughtful, creative or even amenable to change. They are programmed to follow preset instructions and execute automatically. Once the conditions for performance under a smart contract occur, performance cannot be stopped. Because these transactions are automated, they lack features and defenses available to those who enter into typical contractual relationships. Common law contracts are sets of promises or obligations that may be enforced by a court. Once a smart contract is set in motion, no person or court can reverse the transaction. In this way, smart contracts differ fundamentally from traditional contracts because they leave no room for judicial intervention. By design, they evade the risk of what a court may do in fashioning a remedy. Courts have no power to set the transaction aside if it is predicated on fraud or if a common law defense would, under other circumstances, provide a reason to void the transaction. Although the term “smart contract” appears to have taken hold, we propose that these transactions are better thought of as “bot” or “automated” agreements. Re-framing these transactions in this way would reset expectations in line with what the technology can deliver. Adopting this preferential terminology will send a strong informational signal that avoids misrepresenting the abilities of these agreements and more accurately communicates that they execute automatically and eliminate both the risks and benefits that accompany traditional common law contracts.

Keywords: Block-chain, Contracts, Smart Contracts

Suggested Citation

Gerhardt, Deborah R. and Thaw, David, Bot Contracts (November 10, 2020). 62 Arizona Law Review 877 (2020), U. of Pittsburgh Legal Studies Research Paper No. 2020-09, UNC Legal Studies Research Paper, Available at SSRN:

Deborah R. Gerhardt

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
919-962-7219 (Phone)
919-962-3375 (Fax)


David Thaw (Contact Author)

University of Pittsburgh - School of Law ( email )

3900 Forbes Ave.
Pittsburgh, PA 15260
United States


University of Pittsburgh - School of Information Sciences ( email )

Pittsburgh, PA 15260
United States

Yale University - Information Society Project ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States

University of Pittsburgh - Graduate School of Public & International Affairs ( email )

Pittsburgh, PA 15260-0001
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics