Q: Lawyers should deal with this technology for two reasons. First, it could raise new legal and regulatory issues. That would mean a new deal for them. And second, it could replace contracts. Do you already have a sense of the former — what are the legal issues that you see now or are waiting for? The implementation of intelligent contracts in commercial activity should speed up transactions and digitize a large number of physical assets such as oil and gold. But the legal and regulatory bases of smart contracts are still fragile and full of problems of their own. The most important is the settlement of disputes between parties. An intelligent contract is not necessarily legally binding. Some legal experts argue that intelligent contracts are not legal agreements, but means of fulfilling obligations arising from other agreements, such as technological means of automatic payment obligations or obligations related to the transfer of tokens or cryptocurrencies.
The termination of an intelligent contract presents similar challenges. Suppose one party discovers an error in an agreement that grants the other more rights than expected or concludes that the performance of its declared obligations will be much more costly than it anticipated. In a text-based contract, a party may commit or threaten to commit a so-called “effective” offence, i.e. knowingly breaching a contract and paying the resulting damage, if it finds that the costs payable outweigh the harm it would be liable for. In addition, by terminating or threatening to do so, a party may put the opposing party back on the table to negotiate an amicable solution. Smart contracts do not yet offer analog means of self-help. But the two main legal problems of intelligent contracts lie in their origin of the blockchain. The first is the applicability of intelligent contracts. The blockchain is known as a decentralized and unauthorized system, which can be used to quickly conduct business transactions between multiple regions.
The current resolution of disputes varies from country to country and becomes a court. The Turing-complete (Wikipedia Contributors 2019) The computer engine provided by Ethereum is the first computerized transaction protocol that does many of the things that Szabo has presented in his previous writings. Computer programs run on the Ethereum platform are called Smart Contracts. They can enforce certain types of agreements between the parties, as well as a vending machine, but they are not directly related to legal contracts. The Ethereum Smart Contract has become so popular that the Ethereum version of a smart contract has overshadowed the original use of the term and added a lot of confusion about what blockchain can do. There is also the jurisdictional problem. How will disputes related to smart international transaction contracts, which span multiple regions, be resolved? Will the various jurisdictions involved have to cooperate together to bring together a judgment or a settlement of disputes? The problem becomes even more complicated when one considers the legal status of the blockchain.