Is a smart contract a legal “contract”?

According to the definition provided for by law-decree No. 135/2018 converted, with amendments, into law by Law No. 12/2019, paragraph 2, a “smart contract” is a computer programme that operates on technologies based on distributed ledgers and whose execution automatically binds two or more parties on the basis of the effects predefined by them. Smart
contracts meet the requirement of the written form prior to computer identification of the parties involved through a process whose requirements are set by the Agency for Digital Italy (AGID – Agenzia per Italia Digitale) by means of guidelines to be adopted within ninety days from the date of entry into force of the law converting this decree”.
Apart from the aforementioned specific rule, there are other provisions in which smart contracts can be included. For instance, smart contracts fall under the concept of “electronic document” as defined in section 3, point 35 of EU Regulation 910/2014 (eIDAS Regulation), i.e., “any content stored in electronic form, in particular, text or sound, visual or audio-visual recording”.

Furthermore, smart contracts fall under the definition of “computer document” referred to in section 1, letter p) of the Digital Administration Code (CAD), i.e., “the electronic document that contains the computerised representation of legally relevant acts, facts or data”.
It is noted that the Italian legislator has, therefore, recognized that the smart contract has the same legal value and probative force as a written contract, as the one stated in section 2702 of the Italian civil code.
However, in the absence of a more precise regulation by the legislator and in the silence of AGID – not emanating any guideline- the question arises as to whether smart contracts can actually be placed in the area
of contracts as disciplined by the Italian civil code. The debate is still open, but there are good reasons to believe that the smart contract is indeed a ‘legal’ contract, given that the Italian legal system acknowledges:
(i) the parties’ autonomy to determine the content of the contract,
(ii) the freedom of forms unless the law specifies differently, and
(iii) the chance to enter into contracts that do not belong to the types prescribed by the law itself.

Also, it should be noted that if a smart contract meets the minimum contractual requirements of the Italian civil code – namely, agreement, cause, subject matter, and form – it could be considered a contract within the scope of sections 1321 and 1325 of the Italian civil code (which provide the specific discipline for a contract to be valid).

The three essential elements of a valid contract under the Indian Contract Act 1872 are an offer, acceptance of the offer, and mutual consideration. Additional requirements are the competence of parties, free consent, lawful consideration and object, and the Agreement not expressly declared void. If a contract in the electronic form or a Smart Contract meets the above criteria, it will be enforceable in India and recognized under Section 10A of the Information Technology Act, 2000. The only exceptions are Negotiable Instruments, Will, Trust Deeds, and agreements for sale or conveyance of immovable property.

A smart contract, is per se, not a legal contract by itself, but it can be. In Danish law, an agreement
implies the existence of a contract, which is legally binding (Aftalelovens § 1, stk. 1 / Danish
Contracts Legislation § 1, 1 st point). This does not automatically apply when dealing with smart
contracts. A smart contract is therefore not per se a legally binding agreement in the eyes of the
law.

A contract, under French law, is an agreement between parties relating to an obligation, it is therefore subject to the full consent of the parties [Article 1101 of the Civil Code : Un contrat est un accord de volontés entre deux ou plusieurs personnes destiné à créer, modifier, transmettre ou éteindre des obligations.

Where and only where the smart contract has fully received the consent (and I would add the understanding) of the parties, it can be deemed a contract.

Smart contracts are essentially mere codes operating on the principle of “if…then…” on the blockchain. These codes trigger automatically when the predefined conditions are met. Consequently, it would not be accurate to assert that smart contracts are directly and categorically legally established contracts. Nevertheless, a smart contract can be considered legally valid and enforceable if the specific legal requirements are fulfilled. To ascertain these legal requirements, the first step involves accurately determining the subject and nature of the legal relationship and outcome encoded within the smart contract.

The General Provisions of the Turkish Code of Obligations encompass general rules concerning the formation and validity of contracts, which apply to all the contracts concluded in compliance with Turkish Law. Additionally, specific rules might be tailored pursuant to the subject of the contract, which can be found within the Special Provisions of the Turkish Code of Obligations or other relevant legislation.

In conclusion, a smart contract may be considered legally valid, binding and enforceable depending on whether it fulfills the regulatory criteria outlined in the relevant legislation.

Smart contracts aren’t recognized under Kenyan law. However, the law recognizes the
existence of a contract provided there is an offer, acceptance and an exchange of consideration.

Yes, a contract can take all kinds of forms. Whereas a smart contract stipulates an
agreement of wills, with reciprocal rights and obligations through consideration, a smart
contract can also be seen as a legal contract, accordingly to the Brazilian Civil Code.

Smart Contracts per se are mere program code and thus not a legal contract as such. However, under
Austrian law a legal contract consists of offer and acceptance. In legal literature it is argued that such
offer and acceptance can, under certain circumstances, also be expressed via a smart contract. Thus,
smart contracts may also constitute legal contracts. In such cases further legal consequences have to
be considered (e.g. consumer protection laws, transparency requirements, reps and warranties etc).
Hence, a case-by-case analysis is recommended.

A smart contract is a set of rules for an NFT and for transactions involving that NFT.
When an NFT is minted on a blockchain, the “rules” for that particular NFT are defined and
automatically enforced by pieces of code that are recorded on a blockchain, which are referred to
as “smart contracts.” Smart contracts are code-based rules that can be used to automate
transactions. For example, a smart contract might trigger the automatic sale of a client’s
technology stocks if the market value of key parts exceeds a certain price or the
automatic distribution of revenues to various parties’ wallets upon the secondary sale of a
particular NFT.
Whether they are themselves legally binding contracts depends upon the interpretation of
whether there has been an offer and acceptance. But in all events, it is critical to note that the rules
encoded in the smart contract for a given NFT are extremely important to review and understand.
For example, they control what, if any, IP and commercialization rights are transferred when a
particular NFT is sold or purchased.

Polish civil law currently does not have a specific regulation recognizing smart contracts. Nevertheless, under Polish law, a legal contract consists of an offer and acceptance, which can
be expressed in several forms, also in the so-called “documentary form”. A “documentary
form” means submitting a declaration of will in the form of a document in a way that allows identifying the person making the declaration (Article 77(2) of the Civil Code). At the same time,
a document is defined as an information carrier that allows you to get acquainted with its content (Article 77(3) of the Civil Code). In view of the above, it may be concluded that a smart contract will be a legally binding contract under Polish law. However, it should also be remembered that if Polish law provides for a specific form for the validity of a given contract (e.g. a written form for the transfer of copyrights or a notarial deed for the sale of real estate), then a smart contract regarding such obligations will not be legally binding, as it has not been concluded in the appropriate form.