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67 Duke L.J. 313 (2017-2018)
Contracts Ex Machina

handle is hein.journals/duklr67 and id is 321 raw text is: CONTRACTS EX MA CHINA KEVIN WERBACHt & NICOLAS CORNELLtt ABSTRACT Smart contracts are self-executing digital transactions using decentralized cryptographic mechanisms for enforcement. They were theorized more than twenty years ago, but the recent development of Bitcoin and blockchain technologies has rekindled excitement about their potential among technologists and industry. Startup companies and major enterprises alike are now developing smart contract solutions for an array of markets, purporting to offer a digital bypass around traditional contract law. For legal scholars, smart contracts pose a significant question: Do smart contracts offer a superior solution to the problems that contract law addresses? In this article, we aim to understand both the potential and the limitations ofsmart contracts. We conclude that smart contracts offer novel possibilities, may significantly alter the commercial world, and will demand new legal responses. But smart contracts will not displace contract law. Understanding why not brings into focus the essential role of contract law as a remedial institution. In this way, smart contracts actually illuminate the role of contract law more than they obviate it. TABLE OF CONTENTS Introduction ..............................................314 I. Contracts Get Smart ........................... ......319 A. The Evolution of Digital Agreements ......... .........320 B. Bitcoin and the Blockchain ..........................324 C. Blockchain-Based Smart Contracts ................330 II. Conceptualizing Smart Contracts ................. ......338 A. Are Smart Contracts Contracts? ........... .......338 B. What's New Here? ...........343 1. Smart Contracts as Escrow ................ .....344 2. Smart Contracts as Self-Help ...................346 3. Smart Contracts as Entire Agreements ....... .......348 Copyright @ 2017 Kevin Werbach & Nicolas Cornell. t Associate Professor, Legal Studies and Business Ethics Department, The Wharton School, University of Pennsylvania. tt Assistant Professor, University of Michigan Law School.