Formation of Contracts

Abstract

The legal systems under consideration here hold that contracts are formed through a process of offer and acceptance. In order to determine whether or not smart contracts might be accepted as legally binding agreements, the doctrines of contract formations in the different legal systems will be outlined. To this end, we will explore which persons have capacity to contract, what constitutes an offer, and what an offeree ought to do in order to accept an offer. It is only after such an outline has been provided, that the impact of the technology on such matters of law can be discussed. It is because of this, that the chapter at hand will consist of two distinct parts. The first part will provide an overview of the legal regimes that are relevant to the process of contract formation. The second part will give an overview of the impact of the technology, as outlined in the previous chapter, on those legal regimes. It will be shown that existing rules on capacity create challenges for designers and operators of platforms due to the pseudonymous yet transparent nature of platforms. Moreover, the potential to create novel actors, such as decentralized autonomous organisations, results in novel legal questions. It is argued that such actors should be given a certain legal recognition. Lastly, the comparative analysis underlying this chapter will show that all legal systems under investigation here provide ample instruments to give legal effect to smart contracts. Hence, it is shown that, whilst smart contracts are not by definition legal agreements, the legal systems recognise that they might be an expression of intent and therefore might result in a legal agreement.