Smart Contracts and the Law

Develop binding arbitration solutions to resolve disputes.

Law, legal education, arbitration, fiduciary, business systems consultant, full stack developer, developer

Legal systems in many developing countries are slow and unreliable. What is more, they are often subject to endemic corruption. Those who can pay the largest bribes to officials--such as large corporations--tend to get their way.

How can individuals and small businesses who are deploying smart contracts avoid disputes that give rise to lawsuits? The goal is to create the legal resources developers of smart contract dApps need to offer binding arbitration clauses. It is commonly said that code is law when it comes to smart contracts. This is misleading. Most contracts, whether written in natural language or as self-executing code, can give rise to disputes that lead to costly lawsuits.

Solution: The best route to avoid the time, expense and uncertainty associated with lawsuits over smart contracts is writing effective dispute resolution and binding arbitration clauses. We propose to (1) develop educational resources for the Cardano community about the dispute resolution and arbitration process, and (2) create a set of readily available legal templates for binding arbitration clauses that developers can incorporate into their dApps to support users making smart agreements, and (3) create a beta version of a model dApp for binding arbitration.

RELEVANT EXPERIENCE (140 char. limit):

DAVID WATTS, business systems oriented on the problems of blockchain scalability. 

JEFFREY DOWNARD, professor at NAU specializing in law and ethics. 

TOM DIETRICH, contract law, arbitration

Board of Advisors: https://www.keplerscs.com/our-team-1

IP: Open workshop on Zoom in both a live and recorded form. The educational resources will be publicly available via a Youtube channel under copy left permission. The templates will be freely available for developers and dApp users in the Cardano community.

Defining success:

A workshop with more than thirty active participants drawn from the legal and developer communities. Three integrated video tutorials on the use of provisions for choice of law and jurisdiction and binding arbitration clauses in smart contracts. A set of templates for smart agreements written in both natural language and Plutus.

TIMELINE & BUDGET:

PHASE 1:

Months 1-3: Legal Research on choice of law and jurisdiction, dispute resolution and settlement procedures and binding arbitration clauses in smart contracts: ($5,000)

Workshop budget: ($2000)

Website development and and Youtube channel: 40 hours at $50 per hour ($2000)

Months 2-4: Creation and editing of an integrated set of video tutorials on the proper use of provisions for choice of law and jurisdiction and binding arbitration clauses in smart contracts. 20 hours at $75 hour ($3000)

Months 3-5: Development of templates for smart agreements written in both natural language and a design for a dApp to process the clauses in Plutus and Marlowe: ($5000)

Design for a beta version of a dApp to process the clauses in Plutus and Marlowe: ($6000)

Project direction: 15 hours per week for 12 weeks ($4000)

Project participation, oversite and evaluation by members of Board of Advisors months 1-5: 10 hours per week for 20 weeks ($3,000)

Total: ($32000)

PHASE 2:

Months 5-8:  Revise the beta version of the binding arbitration dApp and seek feedback from users.

PHASE 3:

Months 9-12:  Deploy the full version of the binding arbitration dApp

Links:

https://www.youtube.com/channel/UCn7mp5BXNH3pWkHtM85Z3rA

www.KeplerSCS.com

See link at the top of the page to the Conference and Workshop website.

Resources:

Yann Aouidef, Federico Ast, and Bruno Deffains. "Decentralized Justice: A Comparative Analysis of Blockchain Online Dispute Resolution Projects." Frontiers in Blockchain 4 (2021): 3.

Michael Buchwald, "Smart contract dispute resolution: the inescapable flaws of blockchain-based arbitration." U. Pa. L. Rev. 168 (2019): 1369.

REV. ONLINE 35, 39 (2014), http:// scholarlycommons.law.wlu.edu/wlulr-online/vol71/iss2/3/

Joshua A.T. Fairfield, Smart Contracts, Bitcoin Bots, and Consumer Protection, 71 WASH. & LEE L.

Reggie O'Shields, Smart Contracts: Legal Agreements for the Blockchain, 21 N.C.BANKING INST. 177, 183 (2017)

Peter Michaelson and Sandra A. Jeskie. "Blockchain and Smart Agreement Disputes Call for Arbitration's Strengths." Alternatives to the High Cost of Litigation 39, no. 6 (2021): 91-94

James Rogers, Harriet Jones-Fenleigh & Adam Sanitt, Arbitrating Smart Contract Disputes, INT'L ARB. REP., Oct. 2017, at 21, 22 ("Many technologists believe that Smart Contracts replace contract law and courts and tribunals with code.")

Daniel Garrie and Judge Gail Andler, Decentralized Finance Made Simple: What Lawyers Need to Know, Tech News, 6/17/2021, https://www.law.com/legaltechnews/2021/06/17/decentralized-finance-made-simple-what-lawyers-need-to-know/?slreturn=20210718214856