Smart Contracts Legal Agreements For The Blockchain

Although some contracts today must be signed in writing and additional formalities such as those of the Single Code of Trade (UCC) and state fraud laws may be necessary, agreements [7] do not always have to be concluded in writing to be enforceable. [8] As a result, many pure smart code contracts will also be applicable under government contract laws. Szabo`s example of a vending machine is instructive in this regard. There, the buyer has many unspoken rights, but a contract was concluded without significant written conditions as a price indication for each item. The fact that an agreement is reached only in the code, as in the case of intelligent contracts, z.B for intelligent contracts, therefore does not constitute a particular obstacle to the formation of contracts outside the obstacles imposed by the UCC and the laws on fraud. Indeed, many laws and legal structures have long taken into account the role of information technology in contracting. Outside the CFTC context, case law on contributory liability in peer-to-peer technologies can set a useful precedent for protecting developers with the need to protect aggrieved parties through intelligent contracts that are used illegally. For example, according to Metro-Goldwyn-Mayer Studios Inc. v.

Grokster, Ltd.,70 peer-to-peer file-sharing sites are not responsible for users` hurtful uses if: (1) they do not market their product for the “purpose of promoting its use for counterfeit purposes.” (2) (a) have no real knowledge of actual offences, or (b) if they are aware of them, are unable to block and have not been able to block illegal behaviour; and (3) the product is able to find significant use and not a violation of the law. For example, the Uniform Electronic Transactions Act (UETA), which dates back to 1999 and forms the basis of state law in 47 states, provides that electronic records, electronic recordings, computer records produced by computer programs and electronic signatures (i.e. digital signatures using encryption technology for public keys) enjoy, with limited exceptions, the same legal effect as their written counterparts. [9] UETA even goes so far as to recognize the validity of “electronic agents” which it defines as “a computer program or an electronic or other automated means used independently to initiate an act or react in whole or in part to electronic recordings or services without any person having verified or acted.” [10] Under UETA, an electronic agent is “capable of interacting, reacting or interacting with other parties or their electronic agents within the parameters of its programming, as soon as it has been activated by a party, without further attention from that party” [11], a prospective recognition of intelligent contracts. While there are strong arguments, as noted above, for existing government laws to already provide a solid basis for the enforcement of smart contracts, six states have so far amended their laws specifically to allow the application of blockchain-based contracts, and many other states have passed laws recognizing blockchain technology and blockchain-based legal instruments with respect to laws allowing the application of blockchain contracts. , many believe that these states have enacted such laws to appear blockchain-friendly to attract blockchain-based businesses. However, in their attempts to bring more clarity on this issue and encourage the development of the blockchain, these states may have created more uncertainty, partly because of the way these laws are interpreted and partly because of the implicit proposition that existing laws do not cover intelligent contractual transactions.