Are smart contracts legally binding?
Asked 3 years ago
I am intrigued by smart contracts. I really like the idea of individual members collectively making decisions about the future of a project. Before I decide to establish a smart contract, I want to know if they are legally binding. After adding the rules of the contract to the blockchain, are the individual members bound to them in a legal capacity? Thank you!
Philip Burns
Monday, May 09, 2022
Considering the unique nature of smart contracts and how they differ from standard paper agreements, there are some concerns regarding their enforceability. Generally, smart contracts are legally binding when they abide by the rules of contractual arrangements such as:
Offer, acceptance, and consideration – like any agreement, a legally binding smart contract must have an offer, an acceptance of that offer, and consideration.
Legally accepted terms – a smart contract can only be legally binding if its terms and conditions are legally acceptable.
Legal to sign electronically – a legally binding smart contract must be eligible for electronic signing.
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