UK Law Commission’s Stand on Smart Legal Contracts: No Need for New Statutes

The Smart Contract Status Quo

The U.K. Law Commission has declared that England and Wales currently do not need statutory reforms to accommodate smart legal contracts operating within the ambit of digital assets. Their announcement, delivered on a Thursday that likely didn’t set any calendars afire, reiterated the acceptance of smart contracts crafted with distributed ledger technology. This means that the legal framework we’ve been using isn’t as outdated as your grandmother’s recipe for fruitcake.

Incremental Changes and Common Law

The commission suggests only a small-scale evolution of the common law to fit these technological advancements. In a world favoring revolution over evolution, this might seem like a sleeper approach. Yet, they also advised parties engaging in smart contracts to clarify any potential risks related to “the performance of the code.” Basically, if your code misbehaves, it helps to have a chat about it ahead of time—kind of like discussing weekend plans before hitting the road.

Building on the Past: A Collaborative Journey

This latest conclusion underpins earlier insights from the U.K. Jurisdiction Taskforce, which back in 2019 managed to recognize smart contracts as enforceable under local laws—as serious as a prom date who isn’t ghosting you. The Taskforce had also identified crypto assets as tradable property. The Law Commission is mum on providing a date for their next outing with the U.K. government, but they’re keen to tackle potential legal conflicts stemming from emerging technologies come 2022.

Common Law: The Adaptable Foundation

The Law Commission chimed with a significant point: the U.K. common law’s flexibility allows it to keep pace with tech innovation, particularly around smart legal contracts. They argue that with the right tweaks to the existing legal framework, England and Wales can stand as prime real estate for business and innovation, much like a shiny new mall in a formerly desolate region.

The Market’s Evolution: A Practical Outlook

As the usage of smart legal contracts continues to rise, the commission anticipates that the market will gradually formulate established practices and model clauses. This means that soon we could see a buffet of legal templates that bidders can trot out as they navigate the precise, often perky, legalese of their digital agreements.