This paper examines the legal qualification of Smart
Contracts under Swiss law and gives an over-view over how
Smart Contracts may interact with the fundamental rules of
contract law. Furthermore, on the basis of this examination
the need for legislative action with respect to Smart
Contracts will be assessed.
It is concluded that the potential applications of Smart
Contracts on the blockchain are vast and sound very promising.
If applied in a sensible way this technology indubitably will
lead to gains in efficiency of contract execution and lower
transaction costs.
However, Smart Contracts will not prevent contractual disputes
from arising. Consequently, parties will still resort to court
actions. In these cases, Smart Contracts may tend to make
things more complicated because while they may not eliminate
the need for courts they limit the accessibility of courts for
their parties via their self-enforcing nature.
Furthermore, while Smart Contracts may attempt to substitute
law by code that does not mean that they will be able to
render the law useless. There will still be need for mandatory
law for various purposes, including, but not limited, to
protect the parties from adverse consequences which the Smart
Contract technology itself may produce.
The paper can be found in the FinTech Edition, Issue 1, 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
