How are you going to enforce a smart contract? What happens if someone finds a way around the contract? The proliferation in smart contracts has been immense recently and the question that often gets asked is how are you going to enforce them. The hope is that you won’t have to enforce the contract given their nature but there are also circumstances where people try to get around those rules. This article will explain what to do to enforce a smart contract
What is a smart contract?
These are simple programs stored on a blockchain that run when predetermined conditions are met. This means that no party to the contract has to do anything to complete the contract. For example you could have an insurance contract that pays out automatically when a certain weather event occurs in an area. They can also automate workflows triggering the next action when conditions are met.
When might you need to enforce it?
The way that smart contracts are drafted means that ordinarily you will not have to enforce the contract as they are self executing. This means that when an event happens the contract is automatically enforced meaning that enforcement is not necessary.
However there are always going to be situations where a smart contract can’t execute (or may be prevented from executing) these include:
- The smart contract was not properly drafted or was not appropriate for the circumstance.
- A challenge by one of the parties to the terms of the contract.
- Insufficient funds to pay the smart contract.
- Hackers who modify the code.
How would you enforce a smart contract?
Of course, there are always to prevent these risks from occurring and it is hoped that they will not arise. If one of these circumstances (or something we have not considered stops a smart contract from self-executing) then the parties will have to rely on either negotiating between themselves or going to the courts and lawyers to enforce their contracts. Obviously this is not what the parties want so it is important that you get advice from a lawyer before entering into a smart contract to ensure that it works the way you want it to work.
This is an area that we will be watching closely so be sure to subscribe to our newsletter.
How does the Business Legal Lifecycle work with Web 3.0?
The law currently treats web 3.0 transactions and disputes just like a normal dispute. Therefore our Legal Risk Assessment will help you to spot the legal risks in your business. The assessment will actually save you money in the long term by empowering you with the confidence and knowledge to prevent the legal risks in your business. You can then go to your lawyer to reduce your legal risks to prevent legal risks within their business and prevent so many problems that commonly afflict small to medium sized businesses.
Get your Business Legal Lifecycle Legal Risk Assessment by clicking below.
Are you frustrated by your data being owned by someone else? Is the ownership of your data something that is important to you? Most people in western countries agree that they want to own their own data, but what does that mean and will that change with web 3.0?
One of the complaints about web 2.0 is that users do not own their own data. The large platforms (social media and search) that dominate web 2.0 own a lot of data about you, what you like and dislike so that they can better serve you content. This has led to the explosion in web 2.0 platforms that are centralised and are free but this is because you are essentially the product. For example a large social media platform is free for the users, they generate revenue (at least at the time of writing this article in early 2022) by selling ads to people who want you to be aware of your business.
Web 3.0 is based on the idea that control of the system will be decentralised. An ideal of the system is that the data that you generate will be owned by you in a web 3.0 eco-system. For those people who want to own their data and don’t want it owned by a third party this is an attractive element of web 3.0 and something that should be applauded.
Ultimately whether this will be how web 3.0 develops will depend on the business models that come to dominate the web 3.0 ecosystem. It is very likely that they will own some data about you and that they will use that to sell ads to you (for example a metaverse). However it is likely that you will have more control over that data and there will be elements of the web 3.0 ecosystem that do allow you to own your data.
This is an area that we will be watching closely so be sure to subscribe to our newsletter.
How does the Business Legal Lifecycle work with Web 3.0?
The law currently treats web 3.0 transactions and disputes just like a normal dispute. Therefore our Legal Risk Assessment will help you to spot the legal risks in your business. The assessment will actually save you money in the long term by empowering you with the confidence and knowledge to prevent the legal risks in your business. You can then go to your lawyer to reduce your legal risks to prevent legal risks within their business and prevent so many problems that commonly afflict small to medium sized businesses.
Get your Business Legal Lifecycle Legal Risk Assessment by clicking below.
With the proliferation of smart contracts in the world the question arises, just how enforceable are these contracts? The short answer is that so long as they comply with the basic rules of a contract they will be enforceable. However the actual circumstances may vary from country to country or state to state. The reason for this is that to enforce a smart contract outside its automatic terms you are going to need traditional courts to assist. This article will explain what a smart contract is and how they are legally enforceable.
What is a smart contract?
These are simple programs stored on a blockchain that run when predetermined conditions are met. This means that no party to the contract has to do anything to complete the contract. For example you could have an insurance contract that pays out automatically when a certain weather event occurs in an area. They can also automate workflows triggering the next action when conditions are met.
So are they enforceable?
A contract in its most basic form requires 3 things, an offer, an acceptance of that offer and the payment of some consideration (which means that either something is performed or some money is paid). These basic requirements are universal when it comes to a contract so if the smart contract has these three requirements then it should be enforceable. To enforce the smart contract or even challenge the contract you may have to rely on traditional courts.
This means that local laws will apply and the laws may vary from state to state and country to country. There is a body of law called ‘private international law’ which deals with the circumstances in which different types of contract can be enforced across jurisdictions and how that is dealt with. In short there is no simple answer and if you are entering into a smart contract for any substantial sum and you are unsure of what to do if there is a dispute get advice before you enter into that contract.
This is an area that we will be watching closely so be sure to subscribe to our newsletter.
How does the Business Legal Lifecycle work with Web 3.0?
The law currently treats web 3.0 transactions and disputes just like a normal dispute. Therefore our Legal Risk Assessment will help you to spot the legal risks in your business. The assessment will actually save you money in the long term by empowering you with the confidence and knowledge to prevent the legal risks in your business. You can then go to your lawyer to reduce your legal risks to prevent legal risks within their business and prevent so many problems that commonly afflict small to medium sized businesses.
Get your Business Legal Lifecycle Legal Risk Assessment by clicking below.
Web 3.0 is the description given to the latest iteration of the web that involves a much more decentralised version of the internet. The internet has gone through several different phases characterised by Web 1.0 originally created by internet pioneer Tim Berners-Lee. Which then evolved in web 2.0 largely based around search engines and search media. Now transitioning to web 3.0 which is decentralised allowing users to use technology like blockchains to perform a variety of different tasks.
The simplest way to see the different between the different web version is by looking at 5 key points relating to the web and how they work in each version, How people interact, what is the medium of exchange, how is it organised, what is the infrastructure behind the version and who has control. See the following table:
| Web 1.0 | Web 2.0 | Web 3.0 |
Interact | Read | Read-Write | Read-Write-Own |
Medium | Static Text | Interactive Content | Virtual Economies |
Organisation | Companies | Platforms | Networks |
Infrastructure | Personal computers | Cloud and Mobile | Blockchain cloud |
Control | Decentralised | Centralised | Decentralised |
See this article where we define the different terms used in Web 3.0 such as decentralisation, blockchains, metaverse, smart contracts, DAO’s, NFT’s and crypto assets. As new assets develop we will continue to update our content so that you can be aware of what is changing.
The goal of web 3.0 is for a more open internet that is not reliant on a number of large companies and is being designed from the bottom-up allowing anyone to join and use it in their business.
How does the law interact with Web 3.0?
The law has not caught up with the changes in web 3.0. This may change as time passes by and we are sure that governments around the world will want to specifically regulate how people interact in web 3.0. For the time being the local laws of each state and country will be applied to web 3.0 and the transactions that go between the different jurisdictions.
There is an area of the law that deals with the interactions of people between different states and countries around the world, it is called “private international law”. This is an area that is going to need to evolve to ensure that users in different jurisdictions can work together. For instance if you enter into a smart contract with someone in a different country and you wish to challenge the contract you will need to consider all of the different legal considerations that I have discussed above.
This is an evolving area of the law which we will continue to update you on, so ensure that you regularly check back on our site.
How does the Business Legal Lifecycle work with Web 3.0?
The law currently treats web 3.0 transactions and disputes just like a normal dispute. Therefore our Legal Risk Assessment will help you to spot the legal risks in your business. The assessment will actually save you money in the long term by empowering you with the confidence and knowledge to prevent the legal risks in your business. You can then go to your lawyer to reduce your legal risks to prevent legal risks within their business and prevent so many problems that commonly afflict small to medium sized businesses.
Get your Business Legal Lifecycle Legal Risk Assessment by clicking below.
In our previous article we defined Web 3.0 and what it means. In that article we went through a number of different terms that we want to define for you so that you can use them moving forward. This article sets out the basic definition of each of these terms.
Decentralisation
This is a central part of web 3.0. Web 2.0 was largely based on websites using web addresses to find information. This information is stored in a specific location. Due to the nature of web 3.0 content, it may be stored at multiple locations simultaneously and is therefore decentralised.
Currently the big social media and social engine platforms hold a lot of data and in web 3.0 the data that is generated will be stored in different locations and not with the larger platforms. This will allow for less use of the data by the large platforms.
Blockchains
The easiest way to think of a blockchain is as a distributed database that has copies of the database stored in different locations. This means that when the database is updated in one location then it is updated in all of the other locations. As the blockchain is decentralised there is no one central database to rely on. You rely on the different databases stored in different locations to be the same to ensure that they are correct.
The blockchain data is then stored in blocks that are linkedin together via cryptography. When new data comes in fresh data is stored in a chronological order. Another key feature is that once data is entered into a blockchain it can’t be changed, the transactions are permanently recorded and viewable to anyone.
Metaverse
The metaverse is a concept of a virtual world that is persistent, online and 3D. It will allow users to work, meet, play games and socialise together in those 3d spaces. There is no one metaverse in existence at the moment. Several companies are looking to build their own metaverse to be the central hub for all businesses. Given the online environment of the metaverse it will link with blockchains, NFT’s and crypto assets.
Smart Contracts
These are simple programs stored on a blockchain that run when predetermined conditions are met. This means that no party to the contract has to do anything to complete the contract. For example you could have an insurance contract that pays out automatically when a certain weather event occurs in an area. They can also automate workflows triggering the next action when conditions are met.
DAO or Decentralised Autonomous Organisation
A DAO is an entity that is created without a central leadership. The DAO makes decisions based on the members together with a specific set of rules that are enforced on a blockchain. They are naturally based on the internet and decisions are taken by a vote determined by the rules of the organisation.
They are somewhat similar to companies but are not registered in the same way. However the rules of a DAO are much like a company’s constitution or rules governing a company.
NFT’s or Non-Fungible Tokens
An NFT is a unit of data stored on a blockchain that can not be interchanged. It can however by sold or traded where necessary. They general represent real-world objects like art, music and videos but can include so much more. The word non-fungible distinguishes it from fungible tokens which essentially means it can be easily replaced. Non-fungible tokens are therefore unique to the person that owns them. The unique feature is that ownership is set out in blockchain technology so that each one is owned individually.
Crypto Assets
This is a term that is used to describe cryptocurrencies, coins or tokens. These assets do not have a physical form and can’t be backed by physical assets. Crypto assets rely on blockchain technology to store the information.
