Frequently Asked Questions
1. What is a smart contract?
A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement.
Röscheisen, Martin; Baldonado, Michelle; Chang, Kevin; Gravano, Luis; Ketchpel, Steven; Paepcke, Andreas (1998). “The Stanford InfoBus and its service layers: Augmenting the internet with higher-level information management protocols”. Digital Libraries in Computer Science: The MeDoc Approach. Lecture Notes in Computer Science. Springer. 1392: 213–230. doi:10.1007/bfb0052526. ISBN 978-3-540-64493-4.
Fries, Martin; P. Paal, Boris (2019). Smart Contracts (in German). Mohr Siebeck. ISBN 978-3-16-156911-1. JSTOR j.ctvn96h9r.
Savelyev, Alexander (14 December 2016). “Contract Law 2.0: “Smart” Contracts As the Beginning of the End of Classic Contract Law”. Social Science Research Network. SSRN 2885241.
Tapscott, Don; Tapscott, Alex (May 2016). The Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. Portfolio/Penguin. pp. 72, 83, 101, 127. ISBN 978-0670069972.
2. Can smart contracts be changed?
When the smart contract is executed, the software protocol creates an immutable (unchangeable) record of the transaction, linking it to the block of prior transactions in that blockchain. The cryptographic links between each block make it virtually impossible to go back and edit or delete prior transaction data.
Bench, Jonathan. Are Smart Contracts Legal Contracts? April 26, 2023. https://harrisbricken.com/blog/are-smart-contracts-legal-contracts/
3. Are smart contracts legally binding and enforceable in the United States?
Several states have passed or have pending legislation related to smart contracts, ranging from forming exploratory committees to recognizing basic concepts to providing comprehensive treatment.
For example, Illinois passed the Blockchain Technology Act in January 2020, which defines smart contracts and provides that they are valid and enforceable if they meet certain requirements. New York has a bill that simply recognizes the use of blockchain technology and smart contracts in commerce.
There is also a strong argument to be made that existing contract, electronic signature, and related laws and regulations are already adequate to manage the legal implications of smart contracts.
The Arizona governor has signed a bill that officially recognizes blockchain signatures and smart contracts. According to the bill, it states that ‘a record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.’
It further adds that: “Smart contracts may exist in commerce. A contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a smart contract term.”
Morris, Manning & Martin. Smart Contracts And U.S. State Law. April 5, 2023.
Campbell, Rebecca. Official: Arizona Law Recognizes Blockchain Signatures and Smart Contracts, March 4, 2021.
4. Are smart contracts legally binding and enforceable in other countries?
Many countries have incorporated smart contracts into their laws, including Italy and Dubai. Belarus was the first country to legalize smart contracts in 2017.
Smart contracts are computerized transaction protocols that execute contract conditions. They are similar to existing contracts because they have the same goals.
Smart contracts are enforceable as long as they follow the basic rules of contractual agreements.
John, Fáwọlé . Smart Contract Use Cases: Unlocking Blockchain’s Potential. April 19, 2023.
5. If I need to make updates to my Easy IP™ smart contract, what do I do?
Businesses and brands often modify their Intellectual Property over time. Logos evolve and processes are refined. (See KFC example below.) Because smart contracts are immutable you can’t change them. Rather, you want to add another smart contract.
It’s important for you to demonstrate the evolution of your Intellectual Property. (Also like the example below.) Easy IP™ is your simple solution to make this a reality.
