Creating Markets in No-trust Environments: The Law and Economics of Smart Contracts

Helen Eenmaa-Dimitrieva, Maria Jose Schmidt-Kessen

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

Smart contracts, self-executing agreements based on blockchain technology, have the capacity to create trust in what we term no-trust contracting environments. We argue that using them in such environments is the path to unleash the full potential of smart contracts. Compared to the contract enforcement mechanisms characterized by traditional contract law or relational contracts, smart contracts can offer a superior solution for facilitating trade.
Several lawyers and economists have debated whether smart contracts might offer the prospect of cheaper, faster and better transactions. As we discuss below, contract law scholars caution that they neither replicate the relational context essential for the day-to-day practice of contracting nor offer a superior solution to problems addressed by traditional contract law, such as contract validity and legality. We clarify and systematize the current thinking on the legal nature and reliability of smart contracts, and address the concerns of contract law scholars. While doing that, we suggest a step forward in characterizing contracting environments, contract enforcement mechanisms and the trust relationship underlying contracts.
OriginalsprogEngelsk
TidsskriftComputer Law & Security Review
Vol/bind35
Udgave nummer1
Sider (fra-til)69-88
Antal sider20
ISSN0267-3649
DOI
StatusUdgivet - 2019
Udgivet eksterntJa

Emneord

  • Law and economics
  • Contract law
  • Smart contracts
  • Enforcement
  • Trust
  • Efficient breach
  • Relational contracts
  • Blockchain
  • Trustless trust
  • No-trust

Citer dette

@article{dee9c9d6837b42729253f414ebb0c12d,
title = "Creating Markets in No-trust Environments: The Law and Economics of Smart Contracts",
abstract = "Smart contracts, self-executing agreements based on blockchain technology, have the capacity to create trust in what we term no-trust contracting environments. We argue that using them in such environments is the path to unleash the full potential of smart contracts. Compared to the contract enforcement mechanisms characterized by traditional contract law or relational contracts, smart contracts can offer a superior solution for facilitating trade.Several lawyers and economists have debated whether smart contracts might offer the prospect of cheaper, faster and better transactions. As we discuss below, contract law scholars caution that they neither replicate the relational context essential for the day-to-day practice of contracting nor offer a superior solution to problems addressed by traditional contract law, such as contract validity and legality. We clarify and systematize the current thinking on the legal nature and reliability of smart contracts, and address the concerns of contract law scholars. While doing that, we suggest a step forward in characterizing contracting environments, contract enforcement mechanisms and the trust relationship underlying contracts.",
keywords = "Law and economics, Contract law, Smart contracts, Enforcement, Trust, Efficient breach, Relational contracts, Blockchain, Trustless trust, No-trust, Law and economics, Contract law, Smart contracts, Enforcement, Trust, Efficient breach, Relational contracts, Blockchain, Trustless trust, No-trust",
author = "Helen Eenmaa-Dimitrieva and Schmidt-Kessen, {Maria Jose}",
year = "2019",
doi = "10.1016/j.clsr.2018.09.003",
language = "English",
volume = "35",
pages = "69--88",
journal = "Computer Law & Security Review",
issn = "0267-3649",
publisher = "Elsevier Advanced Technology",
number = "1",

}

Creating Markets in No-trust Environments : The Law and Economics of Smart Contracts. / Eenmaa-Dimitrieva, Helen; Schmidt-Kessen, Maria Jose .

I: Computer Law & Security Review, Bind 35, Nr. 1, 2019, s. 69-88.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

TY - JOUR

T1 - Creating Markets in No-trust Environments

T2 - The Law and Economics of Smart Contracts

AU - Eenmaa-Dimitrieva, Helen

AU - Schmidt-Kessen, Maria Jose

PY - 2019

Y1 - 2019

N2 - Smart contracts, self-executing agreements based on blockchain technology, have the capacity to create trust in what we term no-trust contracting environments. We argue that using them in such environments is the path to unleash the full potential of smart contracts. Compared to the contract enforcement mechanisms characterized by traditional contract law or relational contracts, smart contracts can offer a superior solution for facilitating trade.Several lawyers and economists have debated whether smart contracts might offer the prospect of cheaper, faster and better transactions. As we discuss below, contract law scholars caution that they neither replicate the relational context essential for the day-to-day practice of contracting nor offer a superior solution to problems addressed by traditional contract law, such as contract validity and legality. We clarify and systematize the current thinking on the legal nature and reliability of smart contracts, and address the concerns of contract law scholars. While doing that, we suggest a step forward in characterizing contracting environments, contract enforcement mechanisms and the trust relationship underlying contracts.

AB - Smart contracts, self-executing agreements based on blockchain technology, have the capacity to create trust in what we term no-trust contracting environments. We argue that using them in such environments is the path to unleash the full potential of smart contracts. Compared to the contract enforcement mechanisms characterized by traditional contract law or relational contracts, smart contracts can offer a superior solution for facilitating trade.Several lawyers and economists have debated whether smart contracts might offer the prospect of cheaper, faster and better transactions. As we discuss below, contract law scholars caution that they neither replicate the relational context essential for the day-to-day practice of contracting nor offer a superior solution to problems addressed by traditional contract law, such as contract validity and legality. We clarify and systematize the current thinking on the legal nature and reliability of smart contracts, and address the concerns of contract law scholars. While doing that, we suggest a step forward in characterizing contracting environments, contract enforcement mechanisms and the trust relationship underlying contracts.

KW - Law and economics

KW - Contract law

KW - Smart contracts

KW - Enforcement

KW - Trust

KW - Efficient breach

KW - Relational contracts

KW - Blockchain

KW - Trustless trust

KW - No-trust

KW - Law and economics

KW - Contract law

KW - Smart contracts

KW - Enforcement

KW - Trust

KW - Efficient breach

KW - Relational contracts

KW - Blockchain

KW - Trustless trust

KW - No-trust

UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=954926234433&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes

U2 - 10.1016/j.clsr.2018.09.003

DO - 10.1016/j.clsr.2018.09.003

M3 - Journal article

VL - 35

SP - 69

EP - 88

JO - Computer Law & Security Review

JF - Computer Law & Security Review

SN - 0267-3649

IS - 1

ER -