By Dr. Mohammad Al-Thunibat
This post
is addressing the legal issues of smart contracts & continuing the previous
videos we set to address the legal issues of smart contracts & law.
3.
The
enforceability of smart contracts
As
declared in the previous video (Part 3), we addressed two major legal
challenges facing the validity and enforceability of smart contracts in association
to their formation and the nature of coding; so the legal requirements of
enforceability are:
Offer and acceptance, certainty
and consideration;
Relevancy
of formation language & the validity of coded programs to meet this
requirement
We consider the process of
contracting (the wholesale adoption of the phrase) to be unhelpful, as the term
‘contract’ invites the traditional associated concepts:
Consent,
Legal Capacity, Certainty & Consideration
4.
Jurisdiction
& Applicable Law
To decide
which jurisdiction and Law applied in case of failure or breach, one must
consider three main rules:
Place of
contracting,
Place of
execution,
The
agreed terms of jurisdiction and law applicable in case of a breach or conflict
However,
where servers are decentralized and can be spread around the world & where
parties can be contracting anywhere through the net, locating & pinpointing
where a breach or failure occurred (and taking the appropriate cross-border
action) may be complex in smart contracts.
Also,
it's not clear how this system is handling these issues!! Especially where a
Block doesn't allow parties to modify its content.
I hope
this was useful
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