Smart Contracts

Kõlvart, Merit; Poola, Margus; Rull, Addi

doi:10.1007/978-3-319-26896-5_7

Merit Kõlvart^3,4,
Margus Poola⁵ &
Addi Rull⁵

3750 Accesses
50 Citations

Abstract

There has been little discussion about smart contracts in relation to contract law. The concept of smart contracting has remained incomprehensible to most lawyers, and programmers tend to perceive it as a solution that replaces traditional contracts and contract law. The aim of this chapter is to clarify that, usually, a smart contract is a programmed functionality which executes some part of the legal contract. This may be an automated payment function that performs the payment obligation by contract law. Authors do not exclude the possibility that a contract shall be fully performed by a smart contracting solution in the future, but this depends on whether such a program can fulfil all requirements of contract law necessary for the execution of a specific transaction. This chapter provides an overview of the concept of smart contracting, e-contracts, smart property and contractual requirements necessary to conclude a contract.

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Notes

1.
Szabo (1997).
2.
Babbitt and Dietz (2014), p. 10.
3.
Ibid.
4.
Fairfield (2014), p. 38.
5.
Babbitt and Dietz (2014), p. 11. Smart contracts can be used in the process of decentralised autonomous organisations (DAO) which are decentralised networks for narrow artificial intelligent autonomous agents which divide its processes into computationally intractable tasks and tasks which it performs itself. Computationally intractable tasks are such tasks that humans have to perform.
6.
Ibid., p. 10.
7.
DCFR (2009), p. 18.
8.
Miller et al. (2013), p. 1.
9.
Ibid.
10.
Art. 2:101 (1) PECL (2002).
11.
Angelov and Grefen (2003), p. 8.
12.
Ibid.
13.
ICC Guide for eContracting (2004), pp. 3–4.
14.
Szabo (used 28.07.2015). See more about formalising and securing relationships on public networks, available: http://szabo.best.vwh.net/formalize.html.
15.
Miller et al. (2013), p. 1.
16.
Francioni (2007), p. 1.
17.
Ibid.
18.
Legal Information Institute (used 3.8.2015).
19.
Szabo (used 28.07.2015). See more about formalising and securing relationships on public networks, available: http://szabo.best.vwh.net/formalize.html; Hearn (2015). See more about Smart property in relation to Bitcoin, available: https://en.bitcoin.it/wiki/Smart_Property.
20.
Council of Europe (1998), p. 17. See more about The European Convention on Human Rights and property rights: http://www.echr.coe.int/LibraryDocs/DG2/HRFILES/DG2-EN-HRFILES-11(1998).pdf.
21.
Hope (2014).
22.
Ibid.
23.
Hearn (2015). See more about Smart property in relation with Bitcoin, available: https://en.bitcoin.it/wiki/Smart_Property.
24.
Garay et al. (2015), p. 1.
25.
Szabo (used 28.7.2015). See more about formalising and securing relationships on public networks, available: http://szabo.best.vwh.net/formalize.html.
26.
Ibid.
27.
Surdan (2012), p. 632.
28.
Estonian Law of Obligations Act (RT I 2001, 81, 487).
29.
Art. 14-24 CISG (1980).
30.
Art 2.1.1 UNIDROIT Principles 2010.
31.
Art. 2:101 PECL (2002).
32.
Art. II 4:101 DCFR (2009).
33.
Schwenzer (2010), p. 233.
34.
Schwenzer (2010), p. 233; Von Bar et al. (2009), p. 290; UNIDROIT Principles (2010), p. 34.
35.
See, e.g., Art 14-24 of the CISG. The text of the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) (CISG).
36.
Art. 2:103. PECL (2002).
37.
Art. 2:103 (1), PECL (2002).
38.
Art. 2:103 (2), PECL (2002).
39.
Art. 2.1.1 (1) UNIDROIT Principles (2010).
40.
Art. 2.1.13 UNIDROIT Principles (2010).
41.
UNIDROIT Principles (2010), pp. 54–56.
42.
Schwenzer and Mohs (2006).
43.
The text of the CISG does not require that the price must be fixed as a certain number. It is also possible to agree on a formula that allows the calculation of the price.
44.
Huber and Mullis (2007), p. 77.
45.
Art. 14 (1) CISG (1980).
46.
DCFR (2009), pp. 289–290; UNIDROIT Principles (2010), p. 33.
47.
DCFR (2009), pp. 289–290.
48.
Ibid.
49.
DCFR (2009), p. 298.
50.
Art 2.1.1 UNIDROIT Principles (2010) and Art II. – 4:101 DCFR.
51.
UNIDROIT Principles (2010), p. 36.
52.
Art 2.1.1 UNIDROIT Principles (2010).
53.
Ibid.
54.
Ibid.
55.
Art. 2:101 (2), PECL (2002).
56.
Art. 1.2 UNIDROIT Principles (2010).
57.
Art. 1.4 UNIDROIT Principles (2010).
58.
UNIDROIT Principles (2010), p. 37.
59.
Schwenzer and Mohs (2006).
60.
UNIDROIT Principles 2010, p. 37.
61.
See, e.g., Art 14 (2) CISG (1980).
62.
ICC Guide for eContracting (2004). E.g., see more about ICC eTerms2004: http://www.iccwbo.org/products-and-services/trade-facilitation/tools-for-e-business/.
63.
Ravindra (2004).
64.
ICC Guide for eContracting (2004).
65.
Ravindra (2004).
66.
Fairfield (2014), p. 38.
67.
Ethereum/wiki (2015).
68.
Ibid.
69.
E.g., see more about “decentralized Dropbox contract”: Ethereum/wiki (2015). White Paper: A next-Generation Smart Contract and Decentralized Application Platform. Available: https://github.com/ethereum/wiki/wiki/White-Paper.
70.
Ethereum/wiki (2015).
71.
Ibid.
72.
Ibid.
73.
Norta (2015).
74.
Investopedia (used 6.8.2015).
75.
Ibid.
76.
Ibid.
77.
Ethereum/wiki (2015).
78.
Norta et al. (2015), p. 5.

References

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Authors and Affiliations

Estonian Ministry of Justice of Republic of Estonia, Tallinn, Estonia
Merit Kõlvart
Department of Informatics, Tallinn University of Technology, Akadeemia tee 3, 12618, Tallinn, Estonia
Merit Kõlvart
Tallinn Law School, Tallinn University of Technology, Akadeemia tee 3, 12618, Tallinn, Estonia
Margus Poola & Addi Rull

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Merit Kõlvart
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Margus Poola
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Addi Rull
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Correspondence to Merit Kõlvart .

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Tallinn Law School, Tallinn University of Technology, Tallinn, Estonia
Tanel Kerikmäe
Tallinn Law School, Tallinn University of Technology, Tallinn, Estonia
Addi Rull

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Kõlvart, M., Poola, M., Rull, A. (2016). Smart Contracts. In: Kerikmäe, T., Rull, A. (eds) The Future of Law and eTechnologies. Springer, Cham. https://doi.org/10.1007/978-3-319-26896-5_7

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DOI: https://doi.org/10.1007/978-3-319-26896-5_7
Published: 23 February 2016
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-26894-1
Online ISBN: 978-3-319-26896-5
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