Smart Contracts VS Contract Law:Challenges And Responses

Technological advancement under the context of the Internet age has brought many changes to the business transaction as well as causing conflicts to current legal system.As a new type of contract,the advent of smart contracts has revealed the vivid interaction between the law and technology,which overturns the traditional concept with regards to the contract to some extent.Smart contracts exist in the form of code and can be recorded and operated on the blockchain,these figures dramatically deviate from the traditional concept with regards to the contract in terms of contract conclusion,the form of contract and contract performance.Some radical standpoints even hold that,as many business transactions will turn to the online world,the code will be the law and smart contracts will thus completely replace the role of contract law in the business transaction.But on the other hand,the benefits brought by smart contracts may also be the other side of a coin in the light that their inflexibility and immutable nature will directly result in the fact that current contract law may not be easily applicable in the sphere of smart contract applications.Therefore,sufficient legal responses will only be due as long as the legal research on smart contracts has been enhanced.This thesis consists of three parts except for the introduction and conclusion.The first chapter introduces the background related to smart contracts.Besides a sketch on the concept of smart contracts,their form of existence and current applications,this part mainly focus on discrepancies between smart contracts and their traditional counterparts including electronic contracts,and ends up with their benefits and application prospects.The second chapter mainly addresses legal issues in respect of smart contracts,inter alia,identifying what kind of challenges and even conflicts they will bring to traditional contract law.Since smart contracts are intrinsically different from traditional contracts in terms of contract conclusion and contract performance,it is not crystal clear how current contract law system will absorb their legal status and how the court will deal with cases related to smart contracts.Secondly,inflexible figures of smart contracts will undoubtedly clash with the flexibility enshrined in contract law,leading to the difficulty in the application of contract law rules.Besides,the form of smart contracts will also constitute barriers on the contractunderstanding and interpretation,bringing huge challenges to the consumer protection and financial regulation.Last chapter of this thesis will base its arguments on the previous chapter,trying to provide some useful advices on how to regulate smart contracts after both taking into account of relevant legislation and theories in western countries and the current situation in our country.