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The thing is, that's what a lot of smart contract proponents are pushing for. That the legal system has no say over contracts, so the outcome would stand. Or ef

The thing is, that's what a lot of smart contract proponents are pushing for. That the legal system has no say over contracts, so the outcome would stand. Or effectively bake into operating these contracts that the legal system isn't a reprieve against anything.

tshaddox 5y ago
They might be pushing for it, but I just don’t think it’s going to happen, at least for transactions where it’s feasible to sue in court. The courts already deal with traditional contracts and, from what I can tell, they tend to look more at what a reasonable person would expect the outcome of a contract to be than the literal text of the contract.
jollybean 5y ago
"That the legal system has no say over contracts, " An agreement is an agreement subject to laws and jurisdiction. There's no avoiding that. It will be interesting to see how this plays out in the courts.
- lazide 5y ago
  If distributed and decentralized it also runs across a common issue with courts - the ‘make me’ problem. If someone buys product x from seller y, which is based on some decentralized ‘contract’ which is defacto enforced by every node of the network independently - and that product then produces a unjust outcome. You go to court, but what if Y is just a node on the network? And everyone involved is outside the courts jurisdiction? what can an adverse court judgement actually accomplish? It can’t roll back the network activity to fix the smart contract without everyone’s consent - and that seems unlikely. It can declare product X illegal or fine seller Y - but if they have no way to enforce it, what’s the point?
  - Pulcinella 5y ago
    I doubt the judge is going to care that the “contract” passed through a bunch of different peoples hands (nodes in a network). They could still fine the seller or order them to return the funds to X. If Y can’t be hauled into court because they are in another country or you just don’t know their identity, well that isn’t a problem specific to these “distributed smart contracts.”
    - lazide 5y ago
      It is actually a problem specific to these types of contracts. It is very difficult to nearly impossible for me to get money to a company somewhere right now in a way that doesn’t surface who they are and where they are at in some really obvious (and traceable) way - part of the US War on Terror is the anti money laundering, and know your customer rules and heavy handed enforcement of US financial control. In this case, you send some ether somewhere.
  - Daishiman 5y ago
    If a US or EU court finds participants of said node criminally or financially liable and the political will exists (which will happen when someone important enough gets screwed over by a bad contract) they may be deported, face criminal prosecution, be banned from transacting with US financial entities, etc. Those things are not a small deal.
    - lazide 5y ago
      Lots of if’s and May’s there - and that’s true of a ton of things in crypto. It took nearly a decade before the SEC or IRS would even provide basic guidance on what the heck crypto even was in their eyes. Lots of deals gonna happen, lots of fortunes made and lost in that gap.
  - PeterisP 5y ago
    If the seller Y is identifiable but simply abroad, then there are various cross-country agreements that would allow to use the legal process in their country to collect money from them in various ways, especially if there's a lot of money at stake - like the $10M discussed in the article. If the seller is unidentified, then it is possible to get a judgement and work on identifying them. If it's not just a civil dispute but felony fraud, then law enforcement might identify them some years later, it happens. Of course, if everyone involved is properly anonymous then it's very, very hard to enforce anything, and takes enough effort and money so that it's not worth the hassle for small amounts, so for that there's simply some 'caveat emptor' in dealing with foreign anonymnous sellers. If you defraud $10 off of someone across the ocean, you are likely to get away with this. But for large cases of fraud? Everyone makes mistakes now and them that may allow them to get identified, and such fraud can be prosecuted many years later.

tshaddox 5y ago

They might be pushing for it, but I just don’t think it’s going to happen, at least for transactions where it’s feasible to sue in court. The courts already deal with traditional contracts and, from what I can tell, they tend to look more at what a reasonable person would expect the outcome of a contract to be than the literal text of the contract.

jollybean 5y ago

"That the legal system has no say over contracts, " An agreement is an agreement subject to laws and jurisdiction. There's no avoiding that. It will be interesting to see how this plays out in the courts.

lazide 5y ago
If distributed and decentralized it also runs across a common issue with courts - the ‘make me’ problem. If someone buys product x from seller y, which is based on some decentralized ‘contract’ which is defacto enforced by every node of the network independently - and that product then produces a unjust outcome. You go to court, but what if Y is just a node on the network? And everyone involved is outside the courts jurisdiction? what can an adverse court judgement actually accomplish? It can’t roll back the network activity to fix the smart contract without everyone’s consent - and that seems unlikely. It can declare product X illegal or fine seller Y - but if they have no way to enforce it, what’s the point?
- Pulcinella 5y ago
  I doubt the judge is going to care that the “contract” passed through a bunch of different peoples hands (nodes in a network). They could still fine the seller or order them to return the funds to X. If Y can’t be hauled into court because they are in another country or you just don’t know their identity, well that isn’t a problem specific to these “distributed smart contracts.”
  - lazide 5y ago
    It is actually a problem specific to these types of contracts. It is very difficult to nearly impossible for me to get money to a company somewhere right now in a way that doesn’t surface who they are and where they are at in some really obvious (and traceable) way - part of the US War on Terror is the anti money laundering, and know your customer rules and heavy handed enforcement of US financial control. In this case, you send some ether somewhere.
- Daishiman 5y ago
  If a US or EU court finds participants of said node criminally or financially liable and the political will exists (which will happen when someone important enough gets screwed over by a bad contract) they may be deported, face criminal prosecution, be banned from transacting with US financial entities, etc. Those things are not a small deal.
  - lazide 5y ago
    Lots of if’s and May’s there - and that’s true of a ton of things in crypto. It took nearly a decade before the SEC or IRS would even provide basic guidance on what the heck crypto even was in their eyes. Lots of deals gonna happen, lots of fortunes made and lost in that gap.
- PeterisP 5y ago
  If the seller Y is identifiable but simply abroad, then there are various cross-country agreements that would allow to use the legal process in their country to collect money from them in various ways, especially if there's a lot of money at stake - like the $10M discussed in the article. If the seller is unidentified, then it is possible to get a judgement and work on identifying them. If it's not just a civil dispute but felony fraud, then law enforcement might identify them some years later, it happens. Of course, if everyone involved is properly anonymous then it's very, very hard to enforce anything, and takes enough effort and money so that it's not worth the hassle for small amounts, so for that there's simply some 'caveat emptor' in dealing with foreign anonymnous sellers. If you defraud $10 off of someone across the ocean, you are likely to get away with this. But for large cases of fraud? Everyone makes mistakes now and them that may allow them to get identified, and such fraud can be prosecuted many years later.