This article is written by Sayantani Talapatra of South Calcutta Law College during her BA LLB Course in her internship during LeDroit India.
ABSTRACT
In the overall view we can say that with the rapidly increasing globalisation and digitalization of everything the currently evolving new type of transaction is a block chain based reaction taking the shape of contracts that are usually been made between two parties agreeing to certain terms and conditions are thus very important in our daily lives and it will be the future of the upcoming commercial transactions taking place all over the country.As in the earlier times we have often seen that the involvement of the middle men has always caused a great problem in the transaction to be carried on smoothly so the smart contracts which are now being emerging thus are generally becoming the future of transactions making the lives of the people efficient and easier in many ways .The older version of the transactions or in other words contracts involving various commercial transactions used to take a prolonged time period leading to the delayed in the overall period of the commercial transaction taking place.But in the present or the current status of the smart contracts being used in the various commercial transactions the transactions are thus being performed in a more easier and efficient way when it is seen that the certain terms and conditions of the contract has been met automatically or naturally in the due course of time reducing the scope of middleman or any type of problem coming in between .
Scope of the article / List of topics covered:
- Introduction of the topic .
- What are smart contracts and how is it used ?
- Benefits of using smart contracts in daily life .
- Blockchain based smart contracts.
- Future of the smart contracts in commercial transactions.
- Keywords.
- Case law.
INTRODUCTION OF THE TOPIC:
The blockchain based smart contracts are basically kind of record keeping system which is generally being used to keep record of the contracts digitally through various nodes and blocks linked digitally keeping the transaction digitally available for everyone.This type of contracts often used to keep transparency in the busniness policies and transactions among the people from various part of the country.We can say this in a nutshell that block chain based smart contracts often are becoming the basic strengthening factor or the backbone for the upcoming commercial transactions that will take place in the upcoming generations. In this type of transactions or smart contracts there will be a reduction in the involvement of middlemen or any type of frauds in between generating a very clear and transparent process all throughout the way.The never ending time process to complete the following transaction will also get reduce to a large extent leading to the time saving concept among the people. As we know that in every field of our lives time is generally known as the most important factor for carrying on anything be it in business or in our daily lives or we can say in everything thus this smart contracts will ultimately help in reducing time to a larger extent leading to efficiency and transparency in everything and everywhere.
WHAT ARE SMART CONTRACTS AND HOW IS IT USED ?
In normal contracts also we have seen that in the first and the foremost place there is a agreement between two parties who upon the application of the term consideration and thus by fulfilling all the terms and conditions of the contract generally form a contract and in this criteria we have seen that in many places there was a involvement of the middlemen or any type of third person to execute the contract in a more better way possible.But in the modern day the newer version of contracts which we can often refer to as the smart contracts can take place automatically upon the meeting or fulfilling of all the terms and conditions digitally .In the older version or the traditional version of the contract being followed there was more chances of causing problems as the traditional contracts were often seen to have less transparency as compared to the smart contracts in general as smart contracts in the normal sense can automatically be a contract upon fulfilling the certain terms and conditions digitally which are often inbuilt in the system or the commercial transactions which are taking place.Reducing more problems digitally and inbuilt carrying a digital evidence through any type of transactions that are taking place in any type of commercial transaction the blockchain type of smart contracts used in the various type of commercial transactions are on reducing the any type of fraud or any type of online money laundering or any type of problems happening digitally through various type of transactions taking digitally. In the last and the overall view in general the blockchain based smart contracts also act as a digital evidence for the upcomming contracts that are taking place digitally.
Thus to reduce the time taking process or any type of fraud or any type problems occuring digitally the smart contracts that are taking place in the most efficent way reducing all these type of problems and ensuring the most effiecient form of commercial transactions for the upcomming future generations.
BENEFITS OF USING SMART CONTRACTS IN DAILY LIFE :
Taking a look on the bigger picture the modern day smart contracts are generally reducing the problem of huge time consumption,corruption making the form of contracts cheaper as anything that is taking place digitally through automated process can help to reduce the cost in a larger note helping the people to carry on their business efficiently without any type of interaction or any type of problems coming in between.In the age old traditional face of the contracts the automated system of generating contracts were not there which often led to the involvement of corruption or bribery or any type of fraud so smart contracts thus help the people on the bigger picture in this way.
The usuage of the modern day smart type of contracts we can see that these type of contracts are often seen in the various factories or industries taking various commercial transactions . In the various real estate agreements also these days we have seen that there is a involvement of smart contract in every real estate agreements to when there is a automated contract which is being generated without the involvement of any type of persons coming in between.
BLOCKCHAIN BASED SMART CONTRACTS :
In simpler language we can say that the blockchain is a type of systematical or chronological set of digital records and in this case we can say that there is a systematic occurrence of the events or the contracts that are happening as a chain of events happening in a systematic form.Here the contracts excluding the age old traditional form of contracts the blockchain based smart type of contracts often keep a record of the data in the form of the blocks that are happening digitally across the various digital platforms upon which it is generally been taking place if we see the bigger picture in general.
When we are using the term smart contracts we are not mentioning this as the type of contracts that are not based on any type of aritificial intelligence or any type of ai usage this is basically seen as the type of automated contracts that are often seen to get executed upon the fulfillment of certain terms and conditions of the contract.In this type of agreement rather than the traditional age old type of contracts the parties often get involved with the help of certain system generated automated block chain without the involvement of any middlemen or any type of problem comming in between the parties.The concept of the smart contracts was in the first and the foremost place was invented by the legal scholar named Nick Szabo back in 1994 where we can see that the transactions and agreements were automated by fulfilling the conditions being met automatically even before the concept of blockchain in the field of contract even existed .This invention of smart contracts in every field ultimately helped the people in reducing the time taking process and ultimately contributing a better nation in general. In the smart contract there is a automated system of coding or any technical type of process where the agreement or any type of contract automatically takes the place in the due digital process through meeting the certain terms and conditions which is generally being mentioned in the code or automated or-generated in the system or the machine.If we look at the real world or take any of the example of the smart contracts then for taking a clear view the Ethereum Dao which was the most successful smart contract based experiment that was being executed in the year 2016 generally comes to picture in the due process. The dao experiment thus shaped the contract for the upcomming future generations setting a clear view of the commercial transactions that will be taking place in the upcomming future generations. Among the most successful smart contracts that was being executed the notable one was the uniswap in this type of contracts there is a system where any person sitting in any of the corner of the world can enter into the function without getting interrupted by anyone or any type of persons coming in between the parties to the contract. Thus on a nutshell we can say that the blockchain based smart type of contracts where half of the system is automated and system generated can take place automatically without the involvement or including any type of middlemen in general creating a overall transparency in the transaction process and ensuring the betterment of the people in general.
KEYWORDS :
Automated contracts : In these special situation of contracts we can see that the contracts are generally been executed upon meeting the certain terms and conditions that are usually pre determined through a long period of time . In this type of contracts we can often see that there is no such involvement of any third party ,middlemen or any sort of brokrage coming in between for executing the contract between the parties who are willing on something as everything here is basically system generated through the already set terms and conditions or the predetermined terms and conditions. Thus these are generally automated contracts which serve as the most important type of contracts for explaining the smart contracts which is the future of our upcommimg future commercial transactions which will take place.
Blockchain : It is specially the type of system where the datas are interlinked forming a systematic chain of events and thus contributing to the keeping of the records in the digital platforms as a evidence making it tamper proof an without the involvement of any type of problems making it more easier for the upcomming generations to take place.The above mentioned word is used in many places of the article for mentioning and highlighting the importance of it. In the block chain based smart contracts the term plays a very vital role.
In the overall context we can say from examining the above paragraphs and lines of the text that the blockchain based smart contracts will thus become the future of the upcommimg commercial transactions aimimg to reduce the time which is the most important factor in any field and making the contract more profitable for the parties to the contract and making it accessible to anyone who will have a will to be the existing party of the contract. Thus this article highlights the scope of smart contracts its usage and the scope of it for the upcoming generations which will be digitally regulated over the years.
CASE LAW :
Van Loon v. U.S. Treasury (U.S.):
In this case it was seen that a large amount of tornado cash which was issued in the form of crypto currency to help a large amount of North Europian hackers who were generally using the money in a very wrongful way. In this case it was established that the automated smart type of contracts cannot be considered as the type of property owned by anone in general . Thus this case can be called as the most landmark case for describing the smart contracts in general.
