Smart Contracts on Blockchain: What Challenges for Existing Contract Law?

Dr. Maamar Bentria
Assistant Professor of Civil Law
Faculty of Law – University of Abdelhamid Ibn Badis
Mostaganem – Algeria


This paper outline the main characteristics of digitization and technological transformations experienced in the field of electronic transactions, which undeniably caused major upheavals within one of the pivotal legal institutions, namely the institution of contract, with the emergence of a new kind of contracts called “Smart Contracts” as one of the contemporary challenges that this system is facing.
Smart contracts, like other technologies such as Bitcoin or Ethereum, are one of the creative uses of blockchain, an encrypted information technology that stores commercial transactions concluded in chronological order, making them available for universal and free scanning. In addition, transactions that are stored do not accept change, modification or distortion.
This paper raises the problem of adapting the current system of the contract with the new philosophy adopted by these smart contracts, based on the principle of « Disintermediation » of contractual relations (notary, bank, administration …), by promoting a « Peer-to-Peer » contractual regime, for an optimization of contractual security and devote the principle of « Self-enforceability of contract», without an intermediation of a Trusted third-party.
The importance of this issue appeared after responses expressed by some of the comparative systems, such as the American system or to a lesser extent the French system. This paper also seeks to investigate the advantages and problems of enforcement of smart contracts currently and find ways to adapt them to the current system of contract law.
In conclusion this study reached a number of conclusions and recommendations that may benefit our legal system in the Arab world in the future, including the need to accompaniment of this new contractual system, and that the scheme of a « Full smart contractual » relationships is a step that carries many risks. So it is necessary to accompanied smart contract with « a fiat Contract » to preserve its contractual nature, and above all limits must be placed on the use of such contracts whenever they are incompatible with the constants of contract law.

Keywords: Electronic transactions, Contract Efficiency, Contract Conclusion, Contract Performance, Trusted third-party.

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