ISO TR 23455:2019 pdf download – Blockchain and distributed ledger technologies — Overview of and interactions between smart contracts in blockchain and distributed ledger technology systems.
7 Binding and enforceable smart contracts 7.1 General In the context of smart contracts, standardization efforts address, how smart contracts are written, how they are enforced, and how to ensure that the automated performance of a smart contract is faithful to the meaning of any relevant contractual documentation [16] . This clause explores binding and enforceable features of programmable smart contracts enabled by DLT systems. Smart contracts have existed for more than two decades, but the type that are described in the earlier clauses require particular explanation, in order to make sense of their effect, consequences, and enforceability. This clause is not intended to be an exhaustive statement of either the law or the attributes of contracts or smart contracts. It is important to note that some smart contracts are not intended to result in binding contracts in the legal sense; but, such a smart contract may still give rise to enforceable obligations. These issues may be treated differently from country to country. Meanwhile, at the time of writing, different jurisdictions are grappling with, enacting, or repealing different legislative provisions to regulate the use of DLT systems in different contexts. For example, smart contracts that underpin transactions in initial coin offerings (ICOs) may be completely unacceptable in some jurisdictions, while a smart contract that handles intra-institutional banking and other financial transactions may be quite acceptable, in the same jurisdiction or elsewhere. This is important in light of the decentralized, global nature of the internet and public blockchain networks. Already some first attempts to regulate smart contracts are appearing. Just like with other innovative technologies, lawmakers’ approach towards smart contracts is based on the universal principle that legal validity of a smart contract cannot be denied solely because of its smart contract form, unless applicable jurisdiction explicitly requires another form of performing certain transactions. 7.2 Legal enforceability of smart contracts Can a smart contract be regarded as a contract or a part of a contract that is binding and enforceable in law? It is important to remember that for civil law countries the law is something created and, of importance for consideration in the context of blockchain and DLT, changed by legislators (in the jurisdiction for which they are responsible) and subsequently interpreted by courts and other formally recognized dispute resolution bodies in the legal system. For common law countries in addition to legislators creating the law, often the courts create law. It has to be mentioned that ISO, or any other standards body, is neither a legislator responsible for setting law nor a recognized and approved interpreter of that law. As such, it does not make statements concerning the law or its interpretation. A contract is a legally binding agreement containing mutuality of obligation (offer and acceptance rather than simply an offer without acceptance), definitive terms and a consideration. The term “legally binding” means that the contract is enforceable under law through the legal system (which may involve alternate dispute resolution rather than a court of law). Therefore, when a contract, smart or otherwise, is “legally binding” it does not mean the contract is law or can be interpreted as law; it is the enforceability that is the key consideration. A component of smart contracts which is often contended is its legal enforceability.

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