Publication Type

Journal Article

Version

submittedVersion

Publication Date

10-2017

Abstract

If one is to believe the popular press and many “technical writings,” blockchains create not only a perfect transactional environment but also obviate the need for banks, lawyers and courts. The latter will soon be replaced by smart contracts: unbiased and infallible computer programs that form, perform and enforce agreements. Predictions of future revolutions must, however, be distinguished from the harsh reality of the commercial marketplace and the technical limitations of blockchains. The fact that a technological solution is innovative and elegant need not imply that it is commercially useful or legally viable. Apart from attempting a terminological “clean-up” surrounding the term smart contract, this paper presents some technological and legal constraints on their use. It confronts the popular claims concerning their ability to automate transactions and to ensure perfect performance. It also examines the possibility of reducing contractual relationships to code and the ability to integrate smart contracts with the complexities of the real world. A closer analysis reveals that smart contracts can hardly be regarded as a semi-mythical technology liberating the contracting parties from the shackles of traditional legal and financial institutions.

Keywords

Blockchains, distributed ledgers, bitcoin, smart contracts, contract law

Discipline

Commercial Law | Contracts | E-Commerce | Internet Law

Publication

Law, Innovation and Technology

Volume

9

Issue

2

First Page

269

Last Page

300

ISSN

1757-9961

Identifier

10.1080/17579961.2017.1378468

Publisher

Taylor & Francis (Routledge): SSH Titles - no Open Select

Copyright Owner and License

Author

Additional URL

http://doi.org/10.1080/17579961.2017.1378468

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