Eliza Mik

If one is to believe the popular press and many " technical writings, " blockchains create not only a perfect transactional environment but also obviate the need for banks, lawyers and courts. The latter will soon be replaced by smart contracts: unbiased and infallible computer programs that form, perform and enforce agreements. Predictions of future revolutions must, however, be distinguished from the harsh reality of the commercial marketplace and the technical limitations of blockchain technologies. The fact that a technological solution is innovative and elegant need not imply that it is commercially useful or legally viable. Apart from attempting a terminological " clean-up " surrounding the term smart contract, this paper presents some technological and legal constraints on their use. It confronts the commonly made claims concerning their ability to automate the transacting process and to ensure perfect performance. It also examines the possibility of reducing contractual relationships into code and the ability to integrate smart contracts with the complexities of the real world. A closer analysis reveals that smart contracts can hardly be regarded as a semi-mythical technology liberating the contracting parties from the shackles of traditional legal and financial institutions. While some of their technical features seem prima facie attractive, especially to non-lawyers, a closer analysis reveals their many shortcomings.

With the progressive transformation of the Internet from a romanticised instrument of freedom and self-expression into a commercial platform for digital distribution, most websites must be recognised as access interfaces to a wide range of content and services. This paper examines the contracts purportedly governing the use of such content and services. It explores the difficulties of establishing legal intention in a context that is not unambiguously commercial or transactional and contrasts popular beliefs with the basic principles of contract law. It draws a clear distinction between contracts governing traditional e-commerce exchanges, such as buying books on Amazon.com, and contracts governing the very use of websites. In the latter instance, the website (ie the resources made available thereon) constitutes the subject matter of the transaction. Equal importance must be attributed to the fact that such contracts are formed on websites and to the fact that they govern their use. The website user will question the existence of a contract on the basis that he did not have an intention to be legally bound, or had no awareness that a transaction was taking place. The website operator will argue that, objectively, all prerequisites of a legally enforceable agreement have been met. The outcome of the discussion will, to a large extent, depend on whether the user's beliefs and expectations can be regarded as reasonable and on whether it is the user or the operator who deserves the protection of the objective theory of contract.