Legal Considerations Around Smart Contracts: Contracts Between Computer Programs

10 Pages Posted: 20 Sep 2021

See all articles by Simon Gleeson

Simon Gleeson

Clifford Chance; Queen Mary University of London, School of Law - Centre for Commercial Law Studies

Date Written: September 16, 2021

Abstract

Algorithmic trading – where two computer programs deal directly with each other – is a commonplace of modern securities trading. However, in general such trading occurs subject to exchange rule books, or under framework contracts, which establish the legally binding nature of such interactions. When computer programs purport to deal with each other directly outside such a framework, the legal position becomes considerably more complex. This note examines two problems which can arise in such cases; first as to how a contract can be formed at all between two parties in the absence of any conscious act by either party, and second, the consequences for third parties of a finding that such a contract was void or nonexistent.

Keywords: smart contract, cryptotoken, contract, mistake, program trading, exchange trading

JEL Classification: k12, k23, g15,g23

Suggested Citation

Gleeson, Simon, Legal Considerations Around Smart Contracts: Contracts Between Computer Programs (September 16, 2021). Available at SSRN: https://ssrn.com/abstract=3925127 or http://dx.doi.org/10.2139/ssrn.3925127

Simon Gleeson (Contact Author)

Clifford Chance ( email )

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Queen Mary University of London, School of Law - Centre for Commercial Law Studies ( email )

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London, WC2A 3JB
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