Smart Contracts: Some Practical Considerations

In this article, researchers discuss various practical considerations for creating and implementing smart contracts. Many US states have only formed a task force or exploratory committee to look at smart contracts' potential applications. States such as Arkansas, Maryland, Nevada, New York, Oklahoma, South Dakota, Texas, Utah, and Washington have passed or pending smart contract legislation, but such legislation established only a basic framework for smart contracts. These include adding relevant definitions to the states’ business codes, recognizing smart contracts, or permitting the use of relevant technologies in some circumstances. There is a need to ascertain exactly where such contracts stand in relation to the existing regulatory frameworks. Many countries have regulatory frameworks to deal with issues, such as consumer protection and customer due diligence. Some smart contract features could be incompatible with such frameworks. Another related issue that could hamper the adoption of smart contract is whether the smart contract codes can be admissible as evidence in a court. It would be unrealistic to think that a smart contract automatically has the same effect as a traditional ‘natural language’ contract under English law.