Smart Contracts, Interpretation and Rectification

• Autores: Sarah Green
• Localización: Lloyd's maritime and commercial law quarterly, ISSN 0306-2945, Nº. 2, 2018, págs. 234-251
• Idioma: inglés
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• Resumen

  • The advent of smart contracts presents several problems for the traditional law of contract. One of the most pressing issues is how the forensic process of interpretation needs to change in order to accommodate contracts written in computer code. Not only is the language of smart contracts unlike the human languages with which courts are used to dealing, but its logical architecture also differs. This means that enlisting the services of an expert to provide a literal translation for a judge to interpret is unlikely to be helpful. The development of a “reasonable coder” test would seem to be a viable means of proceeding. The self-executing nature of smart contracts means that, in the case of executory agreements, rectification may well become a more widely-used remedy. “Go to the shop and buy a newspaper. If there are any eggs, get a dozen.” Human 1 result in the event the shop has eggs: purchase of one newspaper and a dozen eggs. Computer result in the event the shop has eggs: purchase of a dozen newspapers. What are smart contracts and what are their legal implications? Smart “contracts” are self-executing agreements that exist as a set of instructions to a computer. Defined by Nick Szabo, the man who first coined the phrase, a smart contract is “a computerised transaction protocol that executes the terms of a contract. The general objectives of smart contract design are to satisfy common contractual conditions (such as payment terms, liens, confidentiality, and even enforcement), minimise exceptions both malicious and accidental, and minimise the need for trusted intermediaries. Related economic goals include lowering fraud loss, arbitration and enforcement costs, and other transaction costs.” 2 Whilst the term “smart contracts” is used in the world of technology for all self-executing algorithms, not all such transactions will be contracts in a legal sense, since they lack the requisite characteristics. There is no question, however, that a subset of those transactions will conform to the legal requirements of an enforceable contract, and it is these agreements that are the concern of this discussion.