Basic regulation of Smart Contracts
Tiago Dias18 Aug 2023
Explore this captivating e-book journey across 4 parts:
1️⃣ Basic Regulations of Smart Contracts
2️⃣ How Smart Contracts Works?
3️⃣ The Biggest Benefits of Smart Contracts
4️⃣ Smart Contracts and Real Estate: The Present and the Future
Considering Point 1️⃣ and understanding that the legal side is a big challenge, I’ve chosen to ask some questions to start and promote a broad discussion.
What are the initial aspects that require the implementation of distinct regulations?
✅ Pre-Defined Contract: How and where are the components of the legal transaction gathered? What documentation is essential? Is it obligatory to conduct this process in plain language? In case of any General Terms and Conditions, are specific considerations required?
✅ Smart Contract Programming: which regulations should be applied to the programmer? What are the consequences of coding errors (e.g., nullification, loss of validity, rectification borne by a party or the programmer)? Upon error identification, should there be a mechanism to halt execution or address it subsequently?
✅ Defining Events for enabling self-execution/automation of performance: Is it permissible to leave these determinations solely to one party’s discretion? Can they hinge on a preceding smart contract that relies on the volition of a single party? Is alteration by a third party admissible? Can any data or event serve as the trigger? What regulations are relevant for the individual responsible for supplying event occurrence data?
✅ Performance execution: Is it universally appropriate to regard them as invariably irreversible? Should a mechanism for suspending execution (e.g., Data Act) be anticipated for all scenarios? If so, under what circumstances and by whom should the execution suspension be initiated? Should means be established to alter the execution of individual performances for ensuring atomic operations? Should this provision be made prior to execution or entrust a third party with such authority?
✅ Settlement / Legal Framework of Distributed Ledger Technology (DLT): What legal validity does a DLT possess? Does the content within it carry an inherent presumption of accuracy? Under what circumstances can the content be acknowledged as an enforceable instrument? Could it potentially attain the status of a public document, subject to specific conditions?
Let’s get this community engaged.