THE INTERPRETATION OF SMART CONTRACTS IN THE EU AND THE USA

Abstract

This article argues that the current rising trend in the use of smart contracts requires a radical update of existing legislation. It intends, in the first instance, to outline a notion of the “smart contract”, and then to highlight different understandings of it in the EU and the USA. This article analyses the existing legislation specifically enacted to address smart contracts. From a comparative perspective, the issue of how the existing contract law adapts to regulate and enforce smart contracts in the common and civil law countries is discussed. In light of this, the author analyses whether a smart contract conforms with the common law and civil law requirements for the formation of a valid and legally binding contract. The author concludes that the common principles of  traditional civil law will likely apply to agreements memorialised in code. This paper also outlines the notion that the emergence of “crypto-legal structures” is required due to the peculiarities of the incorporation smart contracts into different legal systems.