IMPLEMENTATION OF THE SMART-CONTRACT CONSTRUCTION IN THE LEGAL SYSTEM OF RUSSIA
Rusakova Ekaterina1, Frolova Eugenia2, Gorbacheva Anna3, Ekaterina Kupchina4*
1Associate professor (Ms.) RUDN University, RUSSIA, email@example.com
2Professor, Dr.in Law (Ms.) RUDN University, RUSSIA, firstname.lastname@example.org
3Ms, RUDN University, RUSSIA, email@example.com
4Associate professor, (Ms.) RUDN University, RUSSIA, firstname.lastname@example.org
The fourth industrial revolution in the world, or the digital revolution, has a significant impact on the legal systems of all countries of the world, including Russia. The settlement of legal issues concerning the digital transformation of society has become a vital factor in the progressive development of national and cross-border trade, the services sector and the movement of capital.
The aims of this study are, firstly, justification of the feasibility of development and implementation of smart contracts in the legal field, secondly, determination of the legal nature of this construction, thirdly, revealing of legal regulation problems that can appear between parties that decided to regulate their relations by smart contract, fourthly, development of possible solutions to the identified problems.
The article attempts to show smart contract value and the legal nature of the smart contract. Today blockchain, particularly smart contracts can be the solution to many existing financial problems that do not entirely meet the needs of the digital age. The use of paper documents leads to significant time delays and inefficient use of resources and creates the risk of errors and fraud.
The ability to qualify a smart contract as a civil contract depends on what exactly is meant by a smart contract in each particular case, taking into account all ambiguities that exist in the relation of the use of this term.
The authors underline that depending on whether all the stages of the transaction or only their part, are specified in a smart contract, it is possible to select a) a fully automated contract (without paper version), b) partially automated with a copy on paper and c) partially automated, mostly on paper (for example, calculations are governed by a smart contract, the rest of the conditions are defined in a regular contract).
The critical problem of the widespread use of smart contracts is that the parties have to rely on a reliable technical expert to fix their agreement in code, or to confirm that the code written by a third party is correct. The parties will also be interested in ensuring that the code will be executed as they envisage. A possible way to provide such guarantees may be a written contract entered into by the parties with the developer of a smart contract.
The paper insists that in regard of making large transactions, insurance with the warranty agreement with the developer could be an effective tool providing additional protection for the interests of the parties since in the process of the code revising it is likely that parties will not notice the mistakes made by the programmer. Besides, the contracting parties will feel at ease from the fact that the insurance company most likely conducted its own code audit before it agreed to insure a smart contract. The article may be interesting for young lawyers as well as practising lawyers and law students.
Keywords: technology, blockchain, smart contract, cybersecurity, cryptocurrency, risk management.
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