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They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into

They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact. > but generally when a person is trying to evade some legal authority, it's probably not for reasons good for society Reminds me of the "nothing to hide" argument, that only someone trying to commit a crime would need or want protection from the legal system. History paints a different picture.

cool_dude85 5y ago
>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact. The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".
- thebean11 5y ago
  Yeah I agree with that. Once the contract has executed, enforcement actions can certainly happen in meatspace. But do you not see the difference between: 1. A normal contract (legal or illegal) that requires outside enforcement in the first place to force parties to comply. 2. A smart contract (legal or illegal) that executes itself without outside enforcement and can be overturned later (not literally overturned, but a subsequent transaction can be forced) by meatspace mechanisms
  - RandomLensman 5y ago
    The vast majority of contracts in (1) does not need enforcing, because it is in both parties interest (at least long-term) to perform. Yes, there is implicit enforcement to some extent, but then "non-society" which don't even have that are not pretty places to be. On (2), sure we can find ways to have the execution fail. In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.
    - thebean11 5y ago
      > The vast majority of contracts in (1) does not need enforcing Of course, people are very careful prior to entering those contracts, because they know how big of a headache it will be if enforcement is needed! > In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain. Well, sure, if you write a contract that makes it possible for one side not to pay up, then that might happen. Having software run escrow is basically the whole point..
      - RandomLensman 5y ago
        Most contracts are so basic as to be invisible, so no, people are not very careful when they buy a chocolate bar, for example If you want smart contracts to be only applicable to very narrow sets of problems so be it, but otherwise you need to be able to allow, for example, unsecured lending and highly uncertain payoffs at T0 (staying in the finance domain)
        thebean11 5y ago
        > people are not very careful when they buy a chocolate bar Ok..sure, but I think it's sort of pedantic to bring up a class of contract that, obviously, nobody in this thread is talking about. It's a bad example anyway; even if you are being pretty careful it's simply not a risky transaction and therefor out of scope for complicated enforcement mechanisms like smart contracts. I don't think smart contracts are very well suited to unsecured lending, at least not with available software. There would be no incentive to pay it back without some mechanism to force collections. Collateralized loans, however, is a great use case that exists already. This is early stage tech, the scope is pretty small. I don't think anybody is arguing the contrary.
- porknubbins 5y ago
  Freedom of contract is pretty well respected in the US, there are very few exceptions where carve outs are made where people are not allowed to contract freely. So its not clear what a “smart contract that breaks US contract law would be”, its much more likely for a smart contract to be a outright scam or illegal though, in which case good luck finding the funds or whom to sue.
RandomLensman 5y ago
Courts remain the legal authority, you cannot trade on for other unless provided by law (as in statute), and then it is back again to the courts to interpret. What did both parties really agree to? IANAL, but intentions and assumptions of the parties can matter - for example, quite a few things you cannot waive in some places, irrespective of what you agree or not.
- gknoy 5y ago
  I don't know. I'm not a lawyer, but I recall that when it comes to contracts, they often allow you to waive protections that the law would normally give you (e.g., specifying that conflict is resolved with arbitration) if both parties agree to it. In the case of smart contracts, where both parties (if I understand it right?) agree that the code defines the contract itself, it seems like saying "... but I made a mistake" (or it has an error) would be very hard to prove. It would be like if you had written in a 3 year no-questions-asked return period into a car contract, rather than a 3 day one, and then tried to litigate when someone actually used that.
  - shkkmo 5y ago
    You can amend some legal requirements, but certainly not all. There are many, many restrictions on the types of contracts that are legally enforceable. > but I made a mistake" (or it has an error) would be very hard to prove I don't think it would be that hard to prove that the implementation of a smart contract doesn't match the clear intent. The bigger issue isn't the disputability of the contract, but the difficulty of identifing who you would take to court.
  - RandomLensman 5y ago
    That is somewhat a US/Common Law perspective, in places with codified civil law might be tougher/different (but again, IANAL - just from experience doing complex contracts)
  - ska 5y ago
    > hey often allow you to waive protections ... if both parties agree to it. This is not really generalizable. Arbitration clauses for example waive one method of recourse in favor of another method of recourse, both already accepted by the courts. I expect you couldn't replace that with trial by combat and expect it to hold in court, but you might be able to argue that a different resolution process with historical precedent would hold - at least you could test it in court.
ineedasername 5y ago
Agreeing the code is the legal authority means implicitly believing the code is perfect: no bugs, no unanticipated edge cases. Which is just not realistic. So when they arise, who decides what happens?

cool_dude85 5y ago

>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact. The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".

thebean11 5y ago
Yeah I agree with that. Once the contract has executed, enforcement actions can certainly happen in meatspace. But do you not see the difference between: 1. A normal contract (legal or illegal) that requires outside enforcement in the first place to force parties to comply. 2. A smart contract (legal or illegal) that executes itself without outside enforcement and can be overturned later (not literally overturned, but a subsequent transaction can be forced) by meatspace mechanisms
- RandomLensman 5y ago
  The vast majority of contracts in (1) does not need enforcing, because it is in both parties interest (at least long-term) to perform. Yes, there is implicit enforcement to some extent, but then "non-society" which don't even have that are not pretty places to be. On (2), sure we can find ways to have the execution fail. In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.
  - thebean11 5y ago
    > The vast majority of contracts in (1) does not need enforcing Of course, people are very careful prior to entering those contracts, because they know how big of a headache it will be if enforcement is needed! > In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain. Well, sure, if you write a contract that makes it possible for one side not to pay up, then that might happen. Having software run escrow is basically the whole point..
    - RandomLensman 5y ago
      Most contracts are so basic as to be invisible, so no, people are not very careful when they buy a chocolate bar, for example If you want smart contracts to be only applicable to very narrow sets of problems so be it, but otherwise you need to be able to allow, for example, unsecured lending and highly uncertain payoffs at T0 (staying in the finance domain)
      - thebean11 5y ago
        > people are not very careful when they buy a chocolate bar Ok..sure, but I think it's sort of pedantic to bring up a class of contract that, obviously, nobody in this thread is talking about. It's a bad example anyway; even if you are being pretty careful it's simply not a risky transaction and therefor out of scope for complicated enforcement mechanisms like smart contracts. I don't think smart contracts are very well suited to unsecured lending, at least not with available software. There would be no incentive to pay it back without some mechanism to force collections. Collateralized loans, however, is a great use case that exists already. This is early stage tech, the scope is pretty small. I don't think anybody is arguing the contrary.
porknubbins 5y ago
Freedom of contract is pretty well respected in the US, there are very few exceptions where carve outs are made where people are not allowed to contract freely. So its not clear what a “smart contract that breaks US contract law would be”, its much more likely for a smart contract to be a outright scam or illegal though, in which case good luck finding the funds or whom to sue.

RandomLensman 5y ago

Courts remain the legal authority, you cannot trade on for other unless provided by law (as in statute), and then it is back again to the courts to interpret. What did both parties really agree to? IANAL, but intentions and assumptions of the parties can matter - for example, quite a few things you cannot waive in some places, irrespective of what you agree or not.

gknoy 5y ago
I don't know. I'm not a lawyer, but I recall that when it comes to contracts, they often allow you to waive protections that the law would normally give you (e.g., specifying that conflict is resolved with arbitration) if both parties agree to it. In the case of smart contracts, where both parties (if I understand it right?) agree that the code defines the contract itself, it seems like saying "... but I made a mistake" (or it has an error) would be very hard to prove. It would be like if you had written in a 3 year no-questions-asked return period into a car contract, rather than a 3 day one, and then tried to litigate when someone actually used that.
- shkkmo 5y ago
  You can amend some legal requirements, but certainly not all. There are many, many restrictions on the types of contracts that are legally enforceable. > but I made a mistake" (or it has an error) would be very hard to prove I don't think it would be that hard to prove that the implementation of a smart contract doesn't match the clear intent. The bigger issue isn't the disputability of the contract, but the difficulty of identifing who you would take to court.
- RandomLensman 5y ago
  That is somewhat a US/Common Law perspective, in places with codified civil law might be tougher/different (but again, IANAL - just from experience doing complex contracts)
- ska 5y ago
  > hey often allow you to waive protections ... if both parties agree to it. This is not really generalizable. Arbitration clauses for example waive one method of recourse in favor of another method of recourse, both already accepted by the courts. I expect you couldn't replace that with trial by combat and expect it to hold in court, but you might be able to argue that a different resolution process with historical precedent would hold - at least you could test it in court.

ineedasername 5y ago

Agreeing the code is the legal authority means implicitly believing the code is perfect: no bugs, no unanticipated edge cases. Which is just not realistic. So when they arise, who decides what happens?